6-K - DPRO - Equibles

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

6-K

REPORT

OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For

the month of November 2021

Commission

File Number: 001-40688

DRAGANFLY

INC.

(Nameof registrant)

2108St. George Avenue

Saskatoon,Saskatchewan S7M OK7

Canada

(Addressof principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

☐ Form<br> 20-F	☒ Form<br> 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Draganfly Inc.
(Registrant)
Date:<br> November 9, 2021	By:	/s/ Paul Sun
---	---	---
	Name:	Paul Sun
	Title:	Chief Financial Officer

Form

6-K Exhibit Index

Exhibit Number	Document Description
99.1	Unaudited Condensed Interim Consolidated Financial Statements of Draganfly Inc. and notes thereto for the Three and Nine Months Ended September 30, 2021.
99.2	Management’s Discussion and Analysis for the Three and Nine Months Ended September 30, 2021.
99.3	Certification of the CEO Pursuant to NI 52-109.
99.4	Certification of the CFO Pursuant to NI 52-109.
99.5	A copy of the registrant’s press release dated November 9, 2021.
101	Interactive<br> Data File.

Exhibit99.1

Draganfly

Inc.

Condensed

Consolidated Interim Financial Statements - Unaudited

Forthe Three and Nine Months Ended September 30, 2021

(Expressedin Canadian Dollars)

DraganflyInc.

CondensedConsolidated Interim Statements of Financial Position

Expressedin Canadian Dollars

			September<br> 30,			December<br> 31,
As<br> at	Notes		2021			2020
				(unaudited)
ASSETS
Current<br> Assets
Cash<br> and cash equivalents		5	$	27,965,517		$	1,982,416
Amounts<br> receivable		6		1,125,007			810,791
Inventory		7		3,253,950			1,233,619
Notes<br> receivable		8		1,639,990			-
Conversion<br> feature on convertible note		8		81,781			-
Prepaids		9		5,141,493			335,022
Total<br> current assets				39,207,738			4,361,848
Non-current<br> Assets
Goodwill		3,4,12		17,675,063			2,166,563
Equipment		11		303,434			153,870
Intellectual<br> property		12		2,506,275			273,867
Investment		10		301,428			-
Right<br> of use asset		13		246,905			144,419
TOTAL<br> ASSETS			$	60,240,843		$	7,100,567
LIABILITIES<br> AND SHAREHOLDERS’ EQUITY
Current<br> Liabilities
Trade<br> payables and accrued liabilities		15	$	1,441,968		$	1,857,177
Customer<br> deposits		16		70,241			385,449
Deferred<br> income		17		189,575			-
Loans		18		6,745			62,978
Derivative<br> liability		19		16,890,998			748,634
Lease<br> liability		14		98,114			93,239
Total current liabilities				18,697,641			3,147,477
Non-current<br> Liabilities
Deferred<br> income		17		1,342			5,062
Loans		18		87,004			34,938
Lease<br> liability		14		165,181			64,885
TOTAL<br> LIABILITIES				18,951,168			3,252,362
SHAREHOLDERS’<br> EQUITY
Share<br> capital		19		98,524,688			36,943,304
Equity<br> reserve		19		7,918,696			3,024,007
Accumulated<br> deficit				(65,109,113	)		(36,119,210	)
Unrealized<br> gain on investments available for sale		10		(198,572	)		-
Accumulated<br> other comprehensive income				153,976			104
TOTAL<br> SHAREHOLDERS’ EQUITY				41,289,675			3,848,205
TOTAL<br> LIABILITIES AND SHAREHOLDERS’ EQUITY			$	60,240,843		$	7,100,567

Natureand Continuance of Operations (Note 1)

Approved and authorized for issuance by the Board of Directors on November 9, 2021.

“Scott Larson”	“Cameron Chell”
Director	Director

The

accompanying notes are an integral part of these condensed consolidated interim financial statements.

DraganflyInc.

CondensedConsolidated Interim Statements of Comprehensive Income (Loss) - Unaudited

Expressedin Canadian Dollars

			September 30,			September 30,			September 30,			September 30,
			For the three months ended						For the nine months ended
			September 30,			September 30,			September 30,			September 30,
	Note		2021			2020			2021			2020
Revenue from sales of goods		20	$	1,351,517		$	1,109,426		$	3,968,807		$	1,866,222
Revenue from provision of services		20		545,475			344,479			1,449,793			1,011,280
TOTAL REVENUE				1,896,992			1,453,905			5,418,600			2,877,502
COST OF SALES				(1,123,942	)		(893,441	)		(3,401,950	)		(1,448,420	)
GROSS PROFIT				773,050			560,464			2,016,650			1,429,082
OPERATING EXPENSES
Amortization		12	$	130,123		$	-		$	269,143		$	1,385
Depreciation		11,13		49,063			36,901			124,278			76,056
Director fees		23		91,928			-			263,147			-
Insurance				1,467,645			12,207			1,504,204			38,269
Office and miscellaneous		21		2,380,907			933,196			5,345,851			2,150,772
Professional fees				1,751,478			767,376			3,462,650			1,503,905
Research and development				36,713			283,823			123,414			314,761
Share-based payments		19		1,260,061			766,510			3,141,824			2,085,571
Travel				49,171			1,121			109,203			18,175
Wages and salaries				789,868			300,869			1,843,795			956,080
Total operating expenses				(8,006,957	)		(3,102,003	)		(16,187,509	)		(7,144,974	)
OTHER INCOME (EXPENSE)
Change in fair value of derivative liability		19		30,562,044			-			(15,278,305	)		-
Finance and other costs		24		739			(10,298	)		(9,968	)		(21,155	)
Foreign exchange gain (loss)				571,833			(88,874	)		496,932			(34,279	)
Gain (loss) on settlement of debt		25		-			(38,879	)		-			28,614
Government income				1,233			30,537			22,894			30,537
Other income (loss)				(14	)		198,742			32,223			1,189,237
Unrealized investment loss		10		(61,429	)		-			(198,572	)		-
NET INCOME (LOSS)			$	23,840,499		$	(2,450,311	)	$	(29,105,655	)	$	(4,522,938	)
Taxes				-			-			(82,820	)		-
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign exchange translation				134,901			(1,232	)		153,872			(1,131	)
COMPREHENSIVE INCOME (LOSS)				23,975,400			(2,451,543	)		(29,034,603	)		(4,524,069	)
Net Income (loss per share)
Basic (post-consolidation)			$	0.79		$	(0.16	)	$	(1.18	)	$	(0.31	)
Diluted (post-consolidation)			$	0.74		$	(0.16	)	$	(1.18	)	$	(0.31	)
Weighted average number of common shares outstanding - basic (post-consolidation)				30,215,930			15,238,483			24,591,235			14,637,090
Weighted average number of common shares outstanding – diluted (post-consolidation)				32,155,088			15,238,483			24,591,235			14,637,090

The

accompanying notes are an integral part of these condensed consolidated interim financial statements.

DraganflyInc.

CondensedConsolidated Interim Statements of Changes in Shareholders’ Equity (Deficiency) - Unaudited

Expressedin Canadian Dollars

			Share Capital			Equity Reserve			Accumulated Deficit			Unrealized Gain on Investments Available for Sale			Accumulated Other Comprehensive Income			Total <br>Shareholders’ Equity <br>(Deficiency)
Balance at December 31, 2019	69,670,613		$	27,786,517		$	2,508,233		$	(28,103,397	)	$	-		$	-		$	2,191,353
Shares issued for exercise of warrants	4,648,000			2,369,193			(1,645,193	)		-			-			-			724,000
Shares issued for acquisition	3,225,438			1,612,719			-			-			-			-			1,612,719
Shares issued as finder’s fees	200,000			100,000			-			-			-			-			100,000
Shares issued for debt settlement	555,409			344,354			-			-			-			-			344,354
Shares issued for exercise of RSUs
Shares issued for exercise of RSUs, shares
Shares issued for exercise of stock options
Shares issued for exercise of stock options, shares
Shares issued for financing	961,538			500,000			-			-			-			-			500,000
Share issue costs
Shares issued in lieu of cash
Shares issued in lieu of cash, shares
Share-based payments	-			-			2,085,571			-			-			-			2,085,571
Share consolidation 5:1
Share consolidation 5:1, shares
Shares issued for financing
Shares issued for financing, shares
Share issue costs
Shares issued for exercise of warrants
Shares issued for exercise of warrants, shares
Share issue costs
Net loss	-			-			-			(4,522,938	)		-			-			(4,522,938	)
Translation of foreign operations	-			-			-			-			-			(1,131	)		(1,131	)
Balance at September 30, 2020	79,260,998		$	32,712,783		$	2,948,611		$	(32,626,335	)	$	-		$	(1,131	)	$	3,033,928
Shares issued for exercise of warrants	3,275,875			1,637,937			-			-			-			-			1,637,937
Shares issued for acquisition	-			566,242			-			-			-			-			566,242
Shares issued for financing	2,566,496			1,518,845			-			-			-			-			1,518,845
Shares issued for exercise of RSUs	999,992			507,497			(507,497	)		-			-			-			-
Share-based payments	-			-			582,893			-			-			-			582,893
Net loss	-			-			-			(3,492,875	)		-			-			(3,492,875	)
Translation of foreign operations	-			-			-			-			-			1,235			1,235
Balance at December 31, 2020	86,093,361		$	36,943,304		$	3,024,007		$	(36,119,210	)	$	-		$	104		$	3,848,205
Shares issued for exercise of warrants	7,902,624			3,951,312			-			-			-			-			3,951,312
Shares issued for acquisition	6,000,000			14,220,000			3,072,857			-			-			-			17,292,857
Shares issued for exercise of RSUs	749,997			396,249			(396,249	)		-			-			-			-
Shares issued for exercise of stock options	1,964,995			1,910,991			(923,743	)		-			-			-			987,248
Shares issued for financing	32,443,457			18,717,438			-			-			-			-			18,717,438
Share issue costs	-			(273,169	)		-			-			-			-			(273,169	)
Shares issued in lieu of cash	75,000			198,000			-			-			-			-			198,000
Share-based payments	-			-			3,141,824			-			-			-			3,141,824
Share consolidation 5:1	(108,183,525	)		-			-			-			-			-			-
Shares issued for financing	5,095,966			25,538,213			-			-			-			-			25,538,213
Share issue costs	-			(3,141,574	)		-			-			-			-			(3,141,574	)
Shares issued for exercise of warrants	15,075			68,430			-			-			-			-			68,430
Share issue costs	-			(4,506	)		-			-			-			-			(4,506	)
Net loss	-			-			-			(28,989,903	)		-			-			(28,989,903	)
Unrealized loss on investments available for sale	-			-			-			-			(198,572	)		-			(198,572	)
Translation of foreign operations	-			-			-			-			-			153,872			153,872
Balance at September 30, 2021	32,156,950		$	98,524,688		$	7,918,696		$	(65,109,113	)	$	(198,572	)	$	153,976		$	41,289,675

Effective July 29, 2021, the Company consolidated its issued and outstanding common shares on a 5 to 1 basis, which resulted in 27,045,909 common shares outstanding post-consolidation. References to common shares, options, warrants, and RSUs in these condensed consolidated interim financial statements are unadjusted and represent the original issuances, grants, forfeitures, cancellations, or exercises unless noted otherwise.

The

accompanying notes are an integral part of these condensed consolidated interim financial statements.

DraganflyInc.

CondensedConsolidated Interim Statements of Cash Flows - Unaudited

Expressedin Canadian Dollars

	For the nine months ended
	September 30, 2021			September 30, 2020
OPERATING ACTIVITIES
Comprehensive loss	$	(29,105,655	)	$	(4,522,938	)
Adjustments for:
Amortization		269,143			1,385
Depreciation		124,278			76,056
Change in fair value of derivative liability		16,142,364			-
Finance and other costs		9,968			21,155
Gain on settlement of debt		-			(28,614	)
Income from government assistance		(22,894	)		-
Shares Issued as acquisition cost		-			100,000
Share-based payments		3,141,824			2,085,571
Unrealized loss on investments available for sale		198,572			-
Adjustment for profit loss		(9,242,400	)		(2,267,385	)
Net changes in non-cash working capital items:
Accounts receivable		(314,216	)		(1,282,029	)
Inventory		(2,020,331	)		(488,384	)
Prepaid expenses		(4,806,471	)		240,518
Right of use asset		(181,037	)		-
Trade payables and accrued liabilities		(407,188	)		486,976
Customer deposits		(315,208	)		(133,831	)
Deferred income		201,425			-
Loans		(1,425	)		-
Lease liability		181,069			-
Tax accrual		(82,820	)		-
Funds used in operations activities		(16,988,602	)		(3,444,135	)
INVESTING ACTIVITIES
Cash paid for acquisition		(477,984	)		(457,407	)
Purchase of equipment		(206,646	)		-
Revaluation of equipment		3,619			-
Development of intellectual property		(238,784	)		-
Investments		(500,000	)		-
Issuance of notes receivable		(1,724,100	)		-
Proceeds from issuance of common shares for financing		-			997,714
Funds provided by (used in) investing activities		(3,143,895	)		540,307
FINANCING ACTIVITIES
Proceeds from issuance of common shares for financing		44,255,651			500,000
Share issue costs		(3,419,249	)		-
Proceeds from issuance of common shares in lieu of cash		198,000			-
Proceeds from issuance of common shares for warrants exercised		4,019,742			724,000
Proceeds from issuance of common shares for stock options exercised		987,248			-
Proceeds from issuance of loans		60,000			123,000
Repayment of loans		(42,742	)		(164,701	)
Repayment of lease liability		(92,891	)		(57,527	)
Funds provided by financing activities		45,965,759			1,124,772
Effects of exchange rate changes on cash		149,839			(1,131	)
Change in cash		25,833,262			(1,779,056	)
Cash, beginning of period		1,982,416			2,429,375
Cash, end of period	$	27,965,517		$	649,188
Cash and cash equivalents consist of the following:
Cash held in banks	$	27,682,566		$	506,645
Guaranteed investment certificate		282,951			142,543
Cash and cash equivalents	$	27,965,517		$	649,188

The

accompanying notes are an integral part of these condensed consolidated interim financial statements.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

1.

NATURE AND CONTINUANCE OF OPERATIONS

Draganfly Inc. (the “Company”) was incorporated on June 1, 2018 under the Business Corporations Act (British Columbia). The Company’s shares began trading on the Canadian Securities Exchange (the “CSE”) under the symbol “DFLY”. On July 30, 2021, the Company’s shares began trading on the Nasdaq Capital Market (the “Nasdaq”) under the symbol “DPRO”. The Company’s shares continue to trade on the CSE, however, they now trade under the symbol “DPRO”. The Company’s head office is located at 2108 St. George Avenue, Saskatoon, SK, S7M 0K7 and its registered office is located at 2800 – 666 Burrard Street, Vancouver, BC, V6C 2Z7.

On August 15, 2019, the Company and 1187607 B.C. Ltd. (“Merger Co.”), a wholly-owned subsidiary of the Company, completed a Business Combination Agreement (the “BCA”) with Draganfly Innovations Inc. (“Draganfly Innovations”) (the “Amalgamation”). Under the Amalgamation, shareholders of Draganfly Innovations received 1.794 fully paid and non-assessable common shares in the authorized share structure of the Company for each Draganfly Innovations share. Consequently, the Company owns 100% of Draganfly Innovations and the Draganfly Innovations shareholders became shareholders of the Company. Draganfly is an operational business of developing and manufacturing multi-rotor helicopters, industrial aerial video systems and civilian small unmanned aerial systems or vehicles. Pursuant to the Amalgamation the Company changed its name to “Draganfly Inc.”.

The outbreak of the coronavirus, also known as “COVID-19,” spread across the globe and is impacting worldwide economic activity. Government authorities have implemented emergency measures to mitigate the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods, and social distancing, have caused material disruption to business globally. Governments and central banks reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The Company will continue to monitor the impact of the COVID-19 pandemic, the duration and ‎impact of which is unknown at this time which may include further disruptions to global supply chains and the manufacturing and delivery of parts that the Company relies on for its products. Although it is not possible to reliably estimate the length and ‎severity of these developments and the impact on the financial results and condition of the ‎Company and its operations in future periods, such impacts are not expected to be ‎significant going forward. Aside from the acquisition of Dronelogics and being opportunistic ‎on ‎other partnerships or acquisitions, the Company has expanded its products and services offered ‎to include ‎health and telehealth applications relating to COVID-19, as a way to mitigate the ‎effects of COVID-19.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

BASIS OF PREPARATION

Statementof Compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Reporting Interpretation Committee (“IFRIC”). The principal accounting policies applied in the preparation of these interim financial statements, including International Accounting Standards (“IAS”) 34 Interim Financial Reporting, are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

The notes presented in these condensed consolidated interim financial statements include only significant events and transactions occurring since the Company’s last fiscal year end and they do not include all of the information required in the Company’s most recent annual financial statements. Except as noted below, these condensed consolidated interim financial statements follow the same accounting policies and methods of application as the Company’s annual financial statements and should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2020, which were prepared in accordance with IFRS as issued by IASB. There have been no significant changes in judgement or estimates from those disclosed in the financial statements for the year ended December 31, 2020.

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on November 9, 2021.

The financial statements of the Company have been prepared on a historical cost basis, modified where applicable. In addition, the financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Basisof consolidation

Each subsidiary is fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

The consolidated financial statements include the accounts and results of operations of the Company and its wholly owned subsidiaries listed in the following table:

SCHEDULE

OF RESULTS OF OPERATIONS

Name of Subsidiary	Place of Incorporation
Draganfly Innovations Inc.	Canada	100	%
Draganfly Innovations USA, Inc.	US	100	%
Dronelogics Systems Inc.	Canada	100	%

All intercompany balances and transactions were eliminated on consolidation.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

DRONELOGICS ACQUISITIONS

All share, RSU, and stock option numbers noted in relation to this transaction are pre-consolidation.

On

April 30, 2020, the Company acquired all of the issued and outstanding shares of Dronelogics Systems Inc. (“Dronelogics”), excluding the cinematography division, for consideration of $500,000 cash and 3,225,438 common shares (the “Transaction”).

In

connection with the Transaction, the Company paid fees of $160,000 to certain advisors consisting of $100,000 by way of 200,000 in shares at a price of $0.50 per share and $60,000 in cash. At closing, the Company (i) granted 445,000 incentive stock options to certain employees of Dronelogics pursuant to the Company’s share compensation plan, exercisable at a price equal to closing price of the shares on the CSE on January 31, 2020. The options have a term of 10 years and 375,000 vest in three equal tranches, on the grant date and first and second anniversaries of the date of grant while 70,000 vest on the first anniversary of the grant date, and (ii) awarded 375,000 RSUs to certain directors and officers of Dronelogics. RSUs were awarded to certain directors and officers of Dronelogics pursuant to the Company’s share compensation plan. The RSUs vest in three equal tranches, on the first, second and third anniversaries of the date of award.

The purchase price allocation (“PPA”) is as follows:

SCHEDULE

OF PURCHASE PRICE ALLOCATION

Number of shares of Draganfly Inc.		3,225,438
Fair value of common shares	$	0.83
Fair value of shares of Draganfly Inc.	$	2,677,114
Present value of the fair value of shares of Draganfly Inc.		2,178,960
Cash portion of purchase price		500,000
Total	$	2,678,960

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

3.	DRONELOGICS ACQUISITION (CONT’D)
Tangible assets acquired
---	---	---	---
Cash	$	42,593
Accounts receivable		98,852
Inventory		629,684
Prepaids and deposits		93,997
Other current assets		3,014
Capital assets		54,946
Right-of-use assets		83,428
Accounts payable and accrued liabilities		(222,766	)
Customer deposits		(245,959	)
Loans		(245,752	)
Other current liabilities		(8,437	)
Lease liabilities		(87,203	)
Total<br> tangible assets acquired		196,397
Identifiable intangible assets
Customer relationships		197,000
Website		119,000
Total<br> identifiable intangible assets		316,000
Goodwill		2,166,563
Total consideration	$	2,678,960

The Company estimated the fair value as follows:

•	Customer<br> relationships based on an income approach, specifically multi-period excess earnings method, by identifying key customers, applying<br> attribution rate of 15% per annum and discount rate of 18% per annum; and
•	Website<br> based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 0.5% and discount rate<br> of 17% per annum.

Furthermore, the excess of the consideration paid over the fair value of the identifiable assets (liabilities) acquired were recognized as goodwill, which primarily consisted of the assembled workforce.

From

the date of the acquisition to December 31, 2020, the acquired business contributed $4,086,350 of revenue and a net income of $434,528.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

4. VITAL INTELLIGENCE ACQUISITION

All unit numbers noted in relation to this transaction are pre-consolidation.

On March 25, 2021, the Company acquired the assets of Vital Intelligence Inc. (“Vital”) for consideration of: (a) a cash payment of $500,000 with ‎‎$50,000 paid upon execution of the asset purchase agreement, $200,000 to be paid at closing and ‎‎$250,000 to be paid on the six-month anniversary date of ‎closing; and (b) ‎6,000,000 units of the ‎Company with each unit being comprised of one common share of the Company and one common share ‎purchase warrant (the “Acquisition”). Each warrant will entitle the holder to acquire one common share for a period of 24 ‎months following closing at an exercise price of $2.67 per common share and the Company will be able ‎to accelerate the expiry date of the warrants after one year in the event the underlying common shares ‎have a value of at least 30% greater than the exercise price of the warrants. The units will be held in ‎escrow with 1,500,000 units being released at closing and the remainder to be released ‎upon the Company reaching certain revenue milestones received from the purchased assets. The units were issued on March 22, 2021.

On August 19, 2021 the parties agreed to reduce the final payment from

$250,000 to $227,984 due to certain assets listed in the purchase agreement had not being delivered by Vital.

The units of the Company are to be releasable from escrow in accordance with the terms and conditions of the Escrow Agreement, as follows:

a)	1,500,000<br> units shall be released on the closing date;
b)	1,500,000<br> units shall be released from escrow upon the Vital assets earning revenue in the aggregate amount of $2,000,000;
c)	1,500,000<br> units shall be released from escrow upon the Vital assets earning revenue in the aggregate amount of $4,000,000; and
d)	1,500,000<br> units shall be released from escrow upon the Vital assets earning revenue in the aggregate amount of $6,000,000.

The

4,500,000 units will be forfeited and cancelled within two years of the closing if the Company does not meet the revenue milestones.

The Vital Intelligence product platform is a combination of proprietary Intellectual Property along with external technology. The base technology is computer vision signal processing that incorporates learning algorithms that can detect heart rate, breathing/respiratory rate, coughs, mask usage, social distancing, temperature, oxygen saturation of blood, and blood pressure. Combined, all these data points provide and deliver an analysis of health and better accuracy in determining infection with various respiratory related issues.

Vital Intelligence has developed a suite of products that is designed to maximize the use of its technology by serving a variety of different market segments and sectors:

-	Drone<br> Vital Sign Detection: Video from a drone is analyzed and can provide an individuals’ heart rate, respiratory rate, and also<br> detect coughing. The data is processed via either a local or cloud storage service in real or near-real time.
-	Drone<br> Social Distancing Detection: Video cameras attached to drones collect data which is then used to determine social distancing. The<br> data is processed via either a local or cloud storage service in real or near-real time.
-	Thermography<br> Kiosk: This product, also branded as Safe Set Solution, is a moveable kiosk (consisting of a thermal detection camera, laptop and<br> stand) to provide thermal detection and reporting systems. Kiosk is able to be placed in entryways or throughways to capture temperature<br> readouts of passers-by.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

4.	VITAL INTELLIGENCE ACQUISITION (CONT’D)
-	Thermography<br> Detection Camera System: This group of products is a stationary camera system, or systems of networked cameras aimed at critical<br> entryways or locations designed to capture core-body temperature of individuals entering a space. Algorithms read video feeds and<br> allow for company or facility use decisions to be made. An example would be capturing temperature readouts from individuals and then<br> integrating that data into a company’s employee badge systems for compliance and monitoring as well as door locking systems<br> to grant access to a space.
---	---
-	Social<br> Distancing Camera System: This product is a stationary camera system, or system of networked cameras aimed at high traffic areas<br> in order to capture data on social distancing. Information is provided via overlay on capture footage. The technology can be used<br> on archived or real-time video footage to assist community health workers in predicting outbreaks of infections.

The PPA is as follows:

SCHEDULE OF PURCHASE PRICE ALLOCATION FOR VITAL INTELLIGENCE

Number of units of Draganfly Inc.		6,000,000
Fair value of units	$	2.88
Fair value of units of Draganfly Inc.	$	17,292,857
Fair value of cash portion of purchase price		488,659
Discount for inventory not received		(22,016	)
Total	$	17,759,500
Identifiable intangible assets
Brand	$	540,000
Software		1,711,000
		2,251,000
Goodwill		15,530,516
Reduction for inventory not received		(22,016	)
Total consideration	$	17,759,500

The Company estimated the fair value as follows:

•	Brand<br> based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 1.0% and discount rate<br> of 40% per annum.
•	Software<br> based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 5.0% and discount rate<br> of 40% per annum.

5. CASH AND CASH EQUIVALENTS

SCHEDULE OF CASH AND CASH EQUIVALENTS

	September 30, 2021		December 31, 2020
Cash held in banks	$	27,682,566	$	1,839,871
Guaranteed investment certificate		282,951		142,545
Cash and Cash Equivalents	$	27,965,517	$	1,982,416

On

March 27, 2020, the Company purchased a $142,000 guaranteed investment certificate (“GIC”) to secure its credit cards. The terms of the GIC are for 1 year at a rate of 0.50% per annum. On March 27, 2021 the company renewed the GIC for $142,710 for 1 year at a rate of 0.10% per annum.

On

May 28, 2021, the Company purchased an additional $140,000 GIC to further secure its credit cards. The terms of the GIC are for 1 year at a rate of 0.35% per annum

During

the nine months ended September 30, 2021 the company accrued interest of $406 on these GIC’s.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

6. AMOUNTS RECEIVABLE

SCHEDULE OF AMOUNTS RECEIVABLE

	September 30, 2021		December 31, 2020
Trade accounts receivable	$	877,631	$	780,254
GST Receivable		247,376	$	-
SR&ED receivable		-		30,537
Trade and Other Receivables	$	1,125,007	$	810,791

INVENTORY

SCHEDULE OF INVENTORIES

	September 30, 2021		December 31, 2020
Finished goods	$	3,205,672	$	1,155,871
Parts		48,278		77,748
Inventories	$	3,253,950	$	1,233,619

During

the nine months ended September 30, 2021, $2,729,300 (2020: $861,807) of inventory was sold and recognized in cost of sales.

NOTES RECEIVABLE

DISCLOSURE

OF NOTES RECEIVABLE

	Start Date	Maturity Date			Principal		Interest		Accretion		Total
Note 1^(1)^	2021-04-21	2022-10-21	0	%	$	169,488	$	-	$	6,057	$	175,545
Note 2	2021-04-26		8	%		200,000		6,926		-		206,926
Note 3^(1)^	2021-06-01	2023-06-01	8	%		127,410		2,836		-		130,246
Note 4	2021-08-19		8	%		250,000		2,301		-		252,301
Note 5^(1)^	2021-09-22	2024-09-22	5	%		873,195		1,178		600		874,973
Total					$	1,620,092	$	13,241	$	6,657	$	1,639,990
(1)	These<br> notes are denominated in US dollars and are converted to Canadian dollars at the reporting<br> date.
---	---

Note 1 was issued to a company working on a project that is of interest to the Company. The loan is non-interest bearing, is due 18 months from the effective date, and is secured by allowing the Company to hold a first priority security interest over all of the company’s present and after-acquired intellectual property in the project. As this note is non-interest bearing, we are required to fair value this note using an 8% discount rate and recognize accretion income over the life of the note (note 17).

Notes 2 and 4 were issued to a company to finance the short-term operations while discussions are ongoing regarding potential further opportunities with the company. The loan is interest bearing at 8% and is due three months from the date of funding or upon closing of a definitive agreement. Past due amounts of this note bear interest at 12%.

Note 3 was issued to a company working on a project that is of interest to the Company. The loan is interest bearing at 8%, is due 24 months from the effective date, and is secured by a general security agreement.

Note 5 was issued to a company working on a project that is of interest to the company. The loan is interest bearing at 5%, is due 36 months after the maturity date, is unsecured, and contains a conversion feature upon sale of the recipient. As of September 30, 2021, the value of the conversion feature is $81,781 and will be accreted over the life of the note.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

9. PREPAID EXPENSES AND DEPOSITS

SCHEDULE OF PREPAID EXPENSES AND DEPOSITS

	September<br> 30, 2021		December<br> 31, 2020
Insurance	$	4,384,504	$	992
Prepaid director fees		107,886		-
Prepaid interest		3,238		-
Prepaid marketing services		36,265		187,826
Prepaid rent		3,583		3,583
Prepaid subscriptions		21,636		5,953
Deposits		584,381		136,668
Prepaid expenses and deposits	$	5,141,493	$	335,022

10. INVESTMENTS

On March 10, 2021, the Company purchased 1,428,571 units of a company for $500,000. Each unit is comprised of one common share and one share purchase warrant. These warrants have an exercise price of $0.50 per warrant, each convert to one common share, and have a life of two years, expiring on March 17, 2023. These assets have been classified as fair value through profit or loss and any unrealized gains or losses will be recognized through the income statement.

SCHEDULE OF INVESTMENTS

Balance at March 10, 2021	$	500,000
Loss		(198,572	)
Balance at September<br> 30, 2021	$	301,428

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

11. EQUIPMENT

SCHEDULE

OF PROPERTY, PLANT AND EQUIPMENT

	Computer<br> Equipment		Furniture<br> and Equipment		Leasehold<br> Improvements		Software		Vehicles			Total
Cost
Balance at January 1, 2020	$	7,000	$	142,173	$	-	$	29,967	$	-		$	179,140
Additions		2,028		21,860		-		-		-			23,888
Net<br> assets acquired in the <br>Acquisition		15,369		7,573		4,352		-		27,652			54,946
Balance at December 31, 2020	$	24,397	$	171,606	$	4,352	$	29,967	$	27,652		$	257,974
Additions		16,044		170,866		-		-		12,000			198,910
Revaluation		-		-		-		-		(3,619	)		(3,619	)
Balance at September<br> 30, 2021	$	40,441	$	342,472	$	4,352	$	29,967	$	36,033		$	453,265
Accumulated depreciation
Balance at January 1, 2020	$	6,761	$	37,944	$	-	$	19,294	$	-		$	63,999
Charge<br> for the year		5,631		22,019		3,220		3,202		6,033			40,105
Balance at December 31, 2020	$	12,392	$	59,963	$	3,220	$	22,496	$	6,033		$	104,104
Charge<br> for the year		8,230		29,734		1,132		1,681		4,950			45,727
Balance at September<br> 30, 2021	$	20,622	$	89,699	$	4,352	$	24,177	$	10,983		$	149,831
Net book value:
December 31, 2020	$	12,005	$	111,643	$	1,132	$	7,471	$	21,619		$	153,870
September 30, 2021	$	19,819	$	252,775	$	-	$	5,790	$	25,050		$	303,434

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

12. INTELLECTUAL PROPERTY

SCHEDULE OF INTELLECTUAL PROPERTY

	Patents		Customer<br> Relationships		Brand<br> and Software		Goodwill			Total
Cost
Balance at January 1, 2020	$	41,931	$	-	$	-	$	-		$	41,931
Intangible<br> assets acquired in the Transaction		-		197,000		119,000		2,166,563			2,482,563
Balance at December 31, 2020	$	41,931	$	197,000	$	119,000	$	2,166,563		$	2,524,494
Intangible assets acquired<br> in the Acquisition		-		-		2,251,000		15,530,516			17,781,516
Additions		-		-		250,551		-			250,551
Inventory<br> adjustment		-		-		-		(22,016	)		(22,016	)
Balance at September<br> 30, 2021	$	41,931	$	197,000	$	2,620,551	$	17,675,063		$	20,534,545
Accumulated amortization
Balance at January 1, 2020	$	40,546	$	-	$	-	$	-		$	40,546
Charge<br> for the year		1,385		26,267		15,866		-			43,518
Balance at December 31, 2020	$	41,931	$	26,267	$	15,866	$	-		$	84,064
Charge<br> for the year		-		25,610		243,533		-			269,143
Balance at September<br> 30, 2021	$	41,931	$	51,877	$	259,399	$	-		$	353,207
Net book value:
December 31, 2020	$	-	$	170,733	$	103,134	$	2,166,563		$	2,440,430
September 30, 2021	$	-	$	145,123	$	2,361,152	$	17,675,063		$	20,181,338

Customerrelationships

On

April 30, 2020, the Company acquired a 100% interest in Dronelogics and assigned $197,000 to the fair value of customer relationships.

Brand

On

April 30, 2020, the Company acquired a 100% interest in Dronelogics and assigned $119,000 to the fair value of the website/domain name.

On

March 25, 2021, the Company acquired the assets of Vital and assigned $540,000 to the fair value of the brand.

Software

On

March 25, 2021, the Company acquired the assets of Vital and assigned $1,711,000 to the fair value of the software.

The Company has begun development of a mobile application and has capitalized the costs incurred to date. Upon completion of the application, it will be amortized over the estimated useful life.

Goodwill

On

April 30, 2020, the Company acquired a 100% interest in Dronelogics, which included goodwill. Goodwill was valued at $2,166,563.

On

March 25, 2021, the Company acquired the assets of Vital, which included goodwill. Goodwill was valued at $15,530,516. This amount was later adjusted downward by $22,016 for the adjusted payment due to certain assets not being delivered.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

12.

INTELLECTUAL PROPERTY (CONT’D)

The key assumptions used in the calculations of the recoverable amounts include sales growth per year, changes in cost of sales and capital expenditures based on internal forecasts.

13. RIGHT OF USE ASSETS

SCHEDULE OF RIGHT OF USE ASSETS

	Total
Cost
Balance at January 1, 2020	$	159,539
Leases<br> acquired in the Acquisition		83,428
Balance at December 31, 2020	$	242,967
Additions		195,281
Lease<br> removal		(7,092	)
Balance at September<br> 30, 2021	$	431,156
Accumulated depreciation
Balance at January 1, 2020	$	29,545
Charge<br> for the period		69,003
Balance at December 31, 2020	$	98,548
Historical<br> correction		7,152
Charge<br> for the period		78,551
Balance at September<br> 30, 2021	$	184,251
Net book value:
December 31, 2020	$	144,419
September 30, 2021	$	246,905

14. LEASE LIABILITY

SCHEDULE OF OPERATING LEASE LIABILITIES

	Total
Balance at January 1, 2020	$	136,073
Leases acquired in the<br> Acquisition		87,203
Interest expense		18,290
Lease<br> Payments		(83,442	)
Balance at December 31, 2020	$	158,124
Addition		166,671
Historical<br> correction		22,043
Interest<br> expense		16,993
Lease<br> payments		(92,891	)
Lease<br> removal		(7,645	)
Balance at September<br> 30, 2021		263,295
Which consists of:
Current lease liability	$	98,114
Non-current<br> lease liability		165,181
Balance at September<br> 30, 2021	$	263,295

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

15.	TRADE PAYABLES AND ACCRUED LIABILITIES

SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES

	September<br> 30, 2021		December<br> 31, 2020
Trade accounts payable	$	933,610	$	813,881
Accrued liabilities		332,234		512,205
Due to related parties (Note 23)		142,415		475,628
Government grant payable (Note 22)		33,709		33,709
GST/PST Payable		-		21,754
Trade payables and accrued liabilities	$	1,441,968	$	1,857,177
16.	CUSTOMER DEPOSITS
---	---

The Company takes a customer deposit on certain orders.

SCHEDULE OF CUSTOMER DEPOSITS

	September<br> 30, 2021		December<br> 31, 2020
Customer deposits	$	70,241	$	385,449
17.	DEFERRED INCOME
---	---

At times, the Company’s subsidiaries may take payment in advance for services to be rendered. These amounts are held and recognized as services are rendered.

SCHEDULE

OF DEFERRED INCOME

	September<br> 30, 2021			December<br> 31, 2020
Deferred income from customers	$	200,000		$	-
Deferred income from government		6,487			5,062
Deferred income from note<br> receivable accretion		(15,570	)		-
Deferred<br> Income		190,917			5,062

The deferred income from the government is the calculated fair value of the interest on the Canadian Emergency Business Account (CEBA) loans which is accreted over the remaining expected life of the loans. The deferred income for the accretion of the note receivable is the calculated fair value of the implied interest for the note issued at 0% interest which is accreted over the expected life of the loan.

18.	LOANS

SCHEDULE

OF LOANS

	Start<br> Date	Maturity<br> Date			Principal		Interest		Total
CEBA	2020-05-19	2022-12-31	0	%	$	36,140	$	616	$	36,756
CEBA	2021-04-23	2022-12-31	0	%		36,140		616		36,756
Vehicle loan	2019-08-30	2024-09-11	6.99	%		16,999		3,238		20,237
Total					$	89,279	$	4,470	$	93,749

On May 19, 2020, Dronelogics received a $40,000 CEBA loan. This loan is currently interest-free and 25% of the loan, up to $10,000, is forgivable if the loan is repaid on or before December 31, 2022. If the loan is not repaid by that date, the loan can be converted to a three-year term loan at an interest rate of 5%.

On

December 4, 2020, the Government of Canada allowed for an expansion of the CEBA loan by $20,000, of which, an additional $10,000 is forgivable if the loan is repaid on or before December 31, 2022.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

18.	LOANS (CONT’D)

On

April 23, 2021, Draganfly Innovations Inc. received a $60,000 CEBA loan. This loan is currently interest free and up to $20,000 is forgivable if the loan is repaid on or before December 31, 2022. If the loan is not repaid by that date, the loan can be converted to a three-year term loan at an interest rate of 5%.

The CEBA loans are unsecured and the vehicle loan is secured by the vehicle.

19.	SHARE CAPITAL

Authorizedshare capital

Unlimited number of common shares without par value.

Issuedshare capital

During the nine months ended September 30, 2021,

-	The<br> Company issued 7,902,624 (pre-consolidation) common shares for the exercise of warrants for $3,951,312.
-	The<br> Company issued 749,997 (pre-consolidation) common shares for the vesting of Restricted Share Units.
-	The<br> Company issued 1,964,995 (pre-consolidation) common shares for the exercise of stock options for $987,248.
-	The<br> Company issued 75,000 (pre-consolidation) common shares in lieu of cash.
-	The<br> Company issued 32,443,457 (pre-consolidation) units for the Regulation A+ financing in the United States. Each unit is comprised<br> of one common share and one share purchase warrant. These warrants have an exercise price of $0.71 USD per warrant (pre-consolidation),<br> each convert to one common share, and have a life of two years.
-	The<br> Company issued 6,000,000 units (pre-consolidation) for the acquisition of Vital Intelligence. Each unit is comprised of one common<br> share and one warrant. These warrants have an exercise price of $2.67 per warrant (pre-consolidation), each convert to one common<br> share, and have a life of two years.
-	The<br> Company acquired 108,183,525 shares (pre-consolidation) in a 5:1 share consolidation transaction.
-	The<br> Company issued 5,095,966 common shares in a private placement for $25,538,213.
-	The<br> Company issued 15,075 commons shares for the exercise of warrants for $63,924.

StockOptions

The Company has adopted an incentive share compensation plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the CSE requirements, grant to directors, officers, employees, and technical consultants to the Company, non-transferable stock options to purchase common shares. The total number of common shares reserved and available for grant and issuance pursuant to this plan shall not exceed 20% (in the aggregate) of the issued and outstanding common shares from time to time. The number of options awarded and underlying vesting conditions are determined by the Board of Directors in its discretion.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

19.	SHARE CAPITAL (CONT’D)

As at September 30, 2021, the Company had the following options outstanding and exercisable:

SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE

Grant<br> Date	Expiry<br> Date	Exercise<br> Price
October 30, 2019	October 30, 2029	$	2.50	8.09	296,665	119,999
November 19, 2019	November 19, 2029	$	2.50	8.14	50,000	33,333
April 30, 2020	April 30, 2030	$	2.50	8.59	87,000	61,999
April 30, 2020	April 30, 2030	$	3.85	8.59	110,000	70,000
July 3, 2020	July 3, 2025	$	3.20	3.76	200,000	166,666
November 24, 2020	November 24, 2030	$	2.50	9.16	32,000	10,000
December 11, 2020	December 11, 2030	$	2.15	9.20	25,000	-
February 2, 2021	February 2, 2031	$	13.20	9.35	30,000	10,000
March 8, 2021	March 8, 2026	$	13.90	4.44	10,000	5,000
April 27, 2021	April 27, 2031	$	10.15	9.58	182,000	-
September 9, 2021	September 9, 2026	$	4.84	4.94	25,825	-
					1,048,490	476,997

Number of options and weighted average exercise prices in the table below are shown as they were outstanding, forfeited, granted, and exercised, pre-consolidation and post-consolidation.

SUMMARY OF CHANGES IN STOCK OPTIONS

			Weighted<br> Average Exercise Price
Outstanding, December 31, 2019	3,725,000		$	0.50
Forfeited	(216,668	)		0.50
Granted	2,460,000			0.63
Outstanding, December 31, 2020	5,968,332		$	0.55
Exercised	(1,964,970	)		0.50
Granted	1,110,000			2.15
Consolidation 5:1	(4,090,662	)		-
Granted<br> (post-consolidation)	25,825			4.84
Exercised<br> (post-consolidation)	-			-
Outstanding, September<br> 30, 2021	1,048,490		$	4.57

During the nine months ended September 30, 2021,

-	The<br> Company granted 150,000 options to an employee. Each option is exercisable at $2.64 per share for 10 years (30,000 options and $13.20<br> per share post-consolidation).
-	The<br> Company granted 50,000 options to a consultant. Each option is exercisable at $2.78 per share for 5 years (10,000 options and $13.90<br> per share post-consolidation).
-	The<br> Company granted 910,000 options to employees. Each option is exercisable at $2.03 per share for 10 years (172,000 options and $10.15<br> per share post-consolidation).
-	The<br> Company underwent an option consolidation at a 5:1 ratio.
-	The<br> Company granted 25,825 options to an employee. Each option is exercisable at $4.84 per share for 5 years.

During the year ended December 31, 2020 (all numbers shown pre-consolidation),

-	The<br> Company granted 445,000 options to employees. Each option is exercisable at $0.50 per share for a period of 10 years from the grant<br> date.
-	The<br> Company issued 600,000 options to consultants. Each option is exercisable at $0.77 per share for a period of 10 years from the grant<br> date.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

19.	SHARE CAPITAL (CONT’D)
-	The<br> Company granted 1,000,000 options to employees. Each option is exercisable at $0.64 per share for a period of 5 years from the grant<br> date.
---	---
-	The<br> Company granted 165,000 options to employees. Each option is exercisable at $0.50 per share for a period of 10 years from the grant<br> date.
-	The<br> Company granted 250,000 options to a consultant. Each option is exercisable at $0.43 per share for a period of 10 years from the<br> grant date.

During

the nine months ended September 30, 2021, the Company recorded share-based payment expense of $1,393,247 (2020: $1,329,854).

RestrictedShare Units

The Company has adopted an incentive share compensation plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the Exchange requirements, grant to directors, officers, employees, and technical consultants to the Company, restricted stock units (RSUs). The number of RSUs awarded and underlying vesting conditions are determined by the Board of Directors in its discretion. RSUs will have a 3-year vesting period following the award date. The total number of common shares reserved and available for grant and issuance pursuant to this plan, and the total number of Restricted Share Units that may be awarded pursuant to this plan, shall not exceed 20% (in the aggregate) of the issued and outstanding common shares from time to time.

Number of RSUs in the table below are shown as they were outstanding, exercised, forfeited, and granted, pre-consolidation and post-consolidation.

As at September 30, 2021, the Company had the following RSUs outstanding:

SUMMARY OF CHANGES IN STOCK OPTIONS


Outstanding, December 31, 2019	3,175,000
Exercised	(999,992	)
Forfeited	(341,667	)
Granted	1,240,000
Outstanding, December 31, 2020	3,073,341
Exercised	(749,997	)
Granted	790,000
Consolidation 5:1	(2,490,677	)
Granted<br> (post-consolidation)	190,826
Outstanding, September<br> 30, 2021	813,493

During

the nine months ended September 30, 2021, (pre-consolidation) the Company accelerated the vesting of 624,998 RSUs, 124,999 RSUs vested naturally, and issued 790,000 RSUs to employees of the Company with each RSU exercisable into one common share of the Company or the cash equivalent thereof upon the vesting conditions being met for a period of three years from the grant date. On July 29, 2021 the Company underwent a 5:1 share consolidation reducing the number of outstanding RSU’s by 2,490,677 units. After consolidation, the Company issued 190,826 RSU’s to employees of the Company.

During

the year ended December 31, 2020, the Company committed to grant 1,240,000 RSUs (pre-consolidation) to employees and consultants of the Company with each RSU exercisable into one common share of the Company or the cash equivalent thereof upon the vesting conditions being met for a period of three years from the grant date.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

19.	SHARE CAPITAL (CONT’D)

During

the nine months ended September 30, 2021, the Company recorded share-based payment expense of $1,748,577 (2020: $2,085,571) in stock-based compensation for RSUs, based on the fair values of RSUs granted which were calculated using the closing price of the Company’s stock on the day prior to grant.

Warrants

During the year ended December 31, 2020 and the nine months ended September 30, 2021, the Company issued warrants (“USD Warrants”) with a USD exercise price. Being in a foreign currency that is not the Company’s functional currency, these USD Warrants are required to be recorded as a financial liability and not as equity. As a financial liability, these USD Warrants are revalued on a quarterly basis to fair market value with the change in fair value being recorded through the Consolidated Statement of Comprehensive Income (loss). The initial fair value of these USD Warrants was parsed out from equity and recorded as a financial liability.

To reach a fair value of the USD Warrants, a Black Scholes calculation is used, calculated in USD as the Company also trades on the Nasdaq. The Black Scholes value per USD Warrant is then multiplied by the number of outstanding warrants and then multiplied by the foreign exchange rate at the end of the period from the Bank of Canada.

Warrant Derivative Liability

SCHEDULE

OF WARRANT DERIVATIVE LIABILITY

Balance at January 1, 2020	$	-
Change in<br> fair value of warrants outstanding		748,634
Balance at December 31, 2020	$	748,634
Change<br> in fair value of warrants outstanding		16,142,364
Balance at September<br> 30, 2021	$	16,890,998

The derivative financial liability consists of the fair value of the non-compensatory share purchase warrants that have exercise prices that differ from the functional currency of the Company and are within the scope of IAS 32 “Financial Instruments: Presentation”. Details of these warrants and their fair values are as follows:

SCHEDULE

OF WARRANTS OUTSTANDING

Issue<br> Date	Exercise<br> Price			Fair<br> Value at July 29, 2021			Fair<br> Value at December 31, 2020
November 30, 2020	US$	0.71	2,556,496	$	3,402,992	2,556,496	$	748,634
February 5, 2021	US$	0.71	6,671,992		8,881,192	-		-
March 5, 2021	US$	0.71	25,771,465		34,304,799	-		-
			34,999,953	$	46,588,983	2,556,496	$	748,634

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

19.	SHARE CAPITAL (CONT’D)

On July 29, 2021, the Company underwent a share consolidation at which time the warrants were consolidated on a 5:1 basis. Results of the consolidation are as follows:

Issue<br> Date	Exercise<br> Price (Post-consolidation)		Number<br> of Warrants Outstanding at July 29, 2021 (Post-consolidation)		Number<br> of Warrants Outstanding at December 31, 2020 (Post-consolidation)
November 30, 2020	US$	3.55		511,299		511,299
February 5, 2021	US$	3.55		1,334,398		-
March 5, 2021	US$	3.55		5,154,293		-
				6,999,991		511,299
Issue<br> Date	Exercise<br> Price		Number<br> of Warrants Outstanding at September 30, 2021		Fair<br> Value at September 30, 2021		Number<br> of Warrants Outstanding at December 31, 2020		Fair<br> Value at December 31, 2020
---	---	---	---	---	---	---	---	---	---	---
November 30, 2020	US$	3.55		496,234	$	1,174,091		511,299	$	748,634
February 5, 2021	US$	3.55		1,334,400		3,157,195		-		-
March 5, 2021	US$	3.55		5,154,321		12,195,143		-		-
July 29, 2021	US$	5.00		250,000		357,704		-		-
September 14, 2021	US$	5.00		4,798		6,865		-		-
				7,239,353	$	16,890,998		511,299	$	748,634

During the year ended December 31, 2020, the Company extended the life of the November 5, 2019 warrants from expiring on November 5, 2020 to expiring on November 5, 2021. To do this, it was required that 25% of the remaining November 5, 2019 warrants needed to be exercised by October 21, 2020 and 25% needed to be exercised by May 5, 2021 which was completed.

Number of warrants and weighted average exercise prices in the table below are shown as they were outstanding, exercised, forfeited, and granted, pre-consolidation and post-consolidation.

SUMMARY OF CHANGES IN STOCK OPTIONS

			Weighted<br> Average Exercise Price
Outstanding, December 31, 2019	18,051,499		$	0.41
Exercised	(7,923,874	)		0.30
Forfeited	(600,000	)		0.50
Granted	2,556,496			0.71
Outstanding, December 31, 2020	12,084,121		$	0.59
Exercised	(7,902,624	)		0.50
Granted	38,443,457			1.02
Consolidation 5:1	(34,099,924	)		-
Granted (post-consolidation)	254,798			5.00
Exercised<br> (post-consolidation)	(15,075	)		3.55
Outstanding, September<br> 30, 2021	8,764,753			4.89

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

19.	SHARE CAPITAL (CONT’D)

As at September 30, 2021, the Company had the following warrants outstanding (post-consolidation):

SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE

Date<br> issued	Expiry<br> date	Exercise<br> price
November 5, 2019	November 5, 2021	CDN$	2.50	325,000
November 30, 2020	November 30, 2022	US$	3.55	496,234
February 5, 2021	February 5, 2023	US$	3.55	1,334,400
March 5, 2021	March 5, 2023	US$	3.55	5,154,321
March 22, 2021	March 22, 2023	CDN$	13.35	1,200,000
July 29, 2021	July 29, 2024	US$	5.00	250,000
September 14, 2021	September 14, 2024	US$	5.00	4,798
				8,764,753

The

weighted average remaining contractual life of warrants outstanding as of September 30, 2021, was 1.36 (December 31, 2020 - 0.90 years).

Of

the 6,000,000 (1,200,000 post-consolidation) warrants issued on March 22, 2021 to acquire Vital, 4,500,000 (900,000 post-consolidation) of the warrants are currently held in escrow, to be released upon completion of the milestones (note 4).

20.	REVENUE

The Company sub-classifies revenue within the following components: product revenue and services revenue. Product revenue comprises of sales of internally assembled multi-rotor helicopters, industrial aerial video systems, civilian small unmanned aerial systems or vehicles, and wireless video systems. Services revenue consists of fees charged for custom engineering, drone as a service work, and training and simulation consulting.

SCHEDULE

OF PRODUCT AND SERVICE REVENUE

	2021		2020		2021		2020
	For the three<br> months ended September 30,				For the nine<br> months ended September 30,
	2021		2020		2021		2020
Product sales	$	1,351,517	$	1,109,426	$	3,968,807	$	1,866,222
Drone service		411,746		344,479		1,073,440		534,088
Custom engineering services		133,719		-		376,353		477,192
Revenue from provision of services		545,475		344,479		1,449,793		1,011,280
Total Revenue	$	1,896,992	$	1,453,905	$	5,418,600	$	2,877,502

The

Company does not derive significant revenue from any (2020 – one) customers, which exceed 10% of total revenues for the nine months ended September 30, 2021 (2020 – $474,701 of custom engineering services revenue).

Consultingrevenue:

On May 22, 2017, the Company executed a standard consulting agreement, whereby the Company would provide consulting, custom engineering and investigating and solving on a project-by-project basis. The Company shall be responsible for the development, design, procurement, fabrication, assembly, integration, checkout, integration and test of hardware, software, and firmware necessary to produce a complete system per each project. The consideration for the services performed are based on the labor cost incurred on an hourly basis and minimal preapproved expenditures.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

20.	REVENUE (CONT’D)

Geographic revenue segmentation is as follows:

SCHEDULE

OF GEOGRAPHIC REVENUE

	2021		2020		2021		2020
	For the three<br> months ended September 30,				For the nine<br> months ended September 30,
	2021		2020		2021		2020
Canada	$	1,296,163	$	1,055,168	$	3,573,820	$	1,811,280
United States		600,401		390,623		1,800,513		1,042,183
International		428		8,114		44,267		24,039
Total Revenue	$	1,896,992	$	1,453,905	$	5,418,600	$	2,877,502

The Company operates in an international market with four reportable operating segments. The below is for the nine months ended September 30, 2021.

SCHEDULE

OF OPERATING SEGMENTS

	Draganfly<br> Inc.			Draganfly<br> Innovations Inc.			Draganfly<br> Innovations USA, Inc.			Dronelogics<br> Systems Inc.			Total
Product sales	$	-		$	301,314		$	31,083		$	3,636,410		$	3,968,807
Drone services		-			-			316,209			757,231			1,073,440
Custom engineering services		-			136,353			-			240,000			376,353
Revenue from provision of services														1,449,793
Total Revenue		-			437,667			347,292			4,633,641			5,418,600
Cost of sales		-			(276,875	)		(233,372	)		(2,891,703	)		(3,401,950	)
Gross profit		-			160,792			113,920			1,741,938			2,016,650
Expenses		12,728,407			1,045,295			827,566			1,586,241			16,187,509
Other income (expenses)		(15,196,061	)		279,650			8,145			(26,530	)		(14,934,796	)
Net income (loss)		(27,924,468	)		(604,853	)		(705,501	)		129,167			(29,105,655	)
Taxes		-			-			-			(82,820	)		(82,820	)
Cumulative translation<br> differences		-			-			153,872			-			153,872
Comprehensive income (loss)	$	(27,924,468	)	$	(604,853	)	$	(551,629	)	$	46,347		$	(29,034,603	)

The Company separated the operating segments based on the existing subsidiaries and have revenues as follows:

-	Draganfly<br> Inc.: No revenues.
-	Draganfly<br> Innovations Inc.: Product sales revenues and revenues derived from custom integration and engineering services.
-	Draganfly<br> Innovations USA, Inc.: Product sales revenues and revenues derived from drone and health/telehealth services.
-	Dronelogics<br> Systems Inc.: Product sales revenues and revenues derived from rental, repair, drone as a service, and training services.

For 2020 and 2021, all revenues are derived from external customers.

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

21.	OFFICE AND MISCELLANEOUS

SCHEDULE

OF OFFICE AND MISCELLANEOUS EXPENSES

	2021		2020		2021		2020
	For the three<br> months ended September 30,				For the nine<br> months ended September 30,
	2021		2020		2021		2020
Advertising, Marketing, and Investor<br> Relations	$	1,842,624	$	809,407	$	4,380,924	$	1,857,675
Compliance fees		229,033		28,048		420,313		93,599
Contract Work		93,479		4,667		152,236		11,485
Other		215,771		91,074		392,378		188,013
Office and Miscellaneous Expenses	$	2,380,907	$	933,196	$	5,345,851	$	2,150,772
22.	GOVERNMENT ASSISTANCE
---	---

In

February 2016, the Company and an Alberta-based government funded not-for-profit organization (the “Organization”) entered into a funding agreement, whereby the Organization would fund 50% of the total costs, up to $375,000 to the Company for the development of a new product. During the year ended December 31, 2016, the Company received $75,000 in funding. On February 28, 2017, the Company and the Organization entered into a repayment agreement, where the Company would refund and repay a portion of the Organization’s initial funding. The repayment agreement set out the terms and conditions upon which the Company was to pay $41,292 over a 12-month repayment plan. In addition, the Company will pay the Organization $33,709 if the Company ever sells a product that the Organization’s funding contributed to. During the year ended December 31, 2019, the final repayment of $13,764 was made and the contingent balance of $33,709 remains in government grants payable (Note 15).

23.	RELATED PARTY TRANSACTIONS

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company’s Board of Directors and corporate officers.

Tradepayables and accrued liabilities:

On

Aug 1, 2019, the Company entered in a business services agreement (the “Agreement”) with Business Instincts Group (“BIG”), a company that Cameron Chell, CEO and director has a material interest in that he previously controlled, to provide: corporate development and governance, strategic facilitation and management, general business services, office space, corporate business development video content, website redesign and management, and online visibility management. The services are provided by a team of up to six consultants and the costs of all charges are based on the fees set in the Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the nine months ended September 30, 2021, the company incurred fees of $198,600 compared to $119,750 in 2020. As at September 30, 2021, the Company was indebted to this company in the amount of $nil (December 31, 2020 - $nil).

On

October 1, 2019, the Company entered into an independent consultant agreement (“Consultant Agreement”) with 1502372 Alberta Ltd, a company controlled by Cameron Chell, CEO and director, to provide executive consulting services to the Company. The costs of all charges are based on the fees set in the Consultant Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the nine months ended September 30, 2021, the Company incurred fees of $190,225 compared to $84,150 in 2020. As at September 30, 2021, the Company was indebted to this company in the amount of $73,500 (December 31, 2020 - $321,741).

DraganflyInc.

Notesto the Condensed Consolidated Interim Financial Statements - Unaudited

ForThe Three and Nine Months Ended September 30, 2021

Expressedin Canadian Dollars

23.	RELATED PARTY TRANSACTIONS (CONT’D)

On

July 3, 2020, the Company entered into an executive consultant agreement (“Executive Agreement”) with Scott Larson, a director of the Company, to provide executive consulting services, as President, to the Company. The costs of all charges are based on the fees set in the Executive Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the nine months ended September 30, 2021, the Company incurred fees of $143,191. As at September 30, 2021, the Company was indebted to this company in the amount of $58,915 (December 31, 2020 - $153,887).

As

at September 30, 2021, the Company had $142,415 (December 31, 2020 - $475,628) payable to related parties outstanding that were included in accounts payable. The balances outstanding are unsecured, non-interest bearing and due on demand.

Keymanagement compensation

Key management includes the Company’s directors and members of the executive management team. Compensation awarded to key management for the three and nine months ended September 30, 2021 and 2020 included:

SCHEDULE OF KEY MANAGEMENT TRANSACTIONS

	2021		2020		2021		2020
	For the three<br> months ended September 30,				For the nine<br> months ended September 30,
	2021		2020		2021		2020
Director fees	$	91,928	$	-	$	263,148	$	-
Management fees paid to a company controlled<br> by CEO and director		84,444		73,500		190,225		203,900
Management fees paid to a company controlled<br> by the President and director		56,223		-		143,191		-
Management fees paid to a company controlled<br> by a former director		45,000		45,000		135,000		120,000
Salaries		197,882		111,292		470,240		245,006
Salaries paid to the former owner of the Company		-		23,051		-		86,097
Share-based payments		627,063		505,702		1,932,309		1,145,141
Key management Transaction	$	1,102,540	$	758,545	$	3,134,113	$	1,800,144
24.	FINANCE AND OTHER COSTS
---	---

SCHEDULE

OF FINANCE AND OTHER COSTS

	2021			2020			2021			2020
	For the three<br> months ended September 30,						For the nine<br> months ended September 30,
	2021			2020			2021			2020
Accretion expense	$	1,233		$	-		$	2,894		$	-
Interest expense on lease liabilities		7,498			-			16,993			-
Interest expense on notes payable		-			1,551			-			2,558
Interest income on GIC		(159	)		(533	)		(406	)		(543	)
Interest income on notes receivable		(9,934	)		-			(13,241	)		-
Interest on outstanding<br> trade payables and bank charges		623			9,280			3,728			19,140
Finance and other costs	$	(739	)	$	10,298		$	9,968		$	21,155
25.	GAIN ON SETTLEMENT OF DEBT
---	---

During

the nine months ended September 30, 2020, as a result of the transactions relating to the private placement and ensuing debt repayments, a gain of $67,493 was recognized on the settlement of outstanding debt.

Exhibit99.2

Management Discussion and Analysis

For The Three and Nine Months Ended September 30, 2021

DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

SpecialNote Regarding Forward Looking Information

This Management Discussion & Analysis (“MD&A”) is intended to provide readers with the information that management believes is required to gain an understanding of the current results of Draganfly Inc. (the “Company” or “Draganfly”) and to assess the Company’s future prospects. Accordingly, certain sections of this report contain forward-looking statements that are based on current plans and expectations. These forward-looking statements are affected by risks and uncertainties that are discussed in this document and that could have a material impact on future prospects. Readers are cautioned that actual events and results will vary.

In this MD&A we describe certain income and expense items that are unusual or non-recurring. There are terms not defined by International Financial Reporting Standards (IFRS). Our usage of these terms may vary from the usage adopted by other companies. Specifically, Grossprofit, Gross margin and Cash flow from operations are undefined terms by IFRS. We provide this detail so that readers have a better understanding of the significant events and transactions that have had an impact on our results.

Certain statements in the MD&A, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties. These include, without limitation, the Company’s current and planned operations in the technology sector and the expected results of new operations and new clients. These statements are based on current expectations involving a number of risks and uncertainties related to all aspects of the technology sector. These risks and uncertainties include, but are not restricted to, continued increased demand for the Company’s products, the Company’s ability to maintain its technological and competitive advantages, the Company’s ability to attract and retain key employees, the ability of the Company to take advantage of its intellectual property, the Company’s ability to raise capital on acceptable terms when needed and the availability of key suppliers and contractors. These uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These forward-looking statements are based on the estimates and opinions of Management on the dates they are made and are expressly qualified in their entirety by this notice. The reader is cautioned not to rely on these forward-looking statements. The Company assumes no obligation to update forward-looking statements should circumstances or Management’s estimates or opinions change except as required by securities laws.

The following MD&A is presented and dated as of November 9, 2021 and should be read in conjunction with the unaudited consolidated financial statements and related notes for the three and nine months ended September 30, 2021 and the annual consolidated financial statements and related notes for the year ended December 31, 2020. The Company’s audited consolidated financial statements have been prepared on the “going concern” basis, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

The operations of the Company have been primarily funded through internally generated cashflow and private placements of equity and convertible debentures. The continued operations of the Company are dependent on the Company’s ability to generate profitable operations in the future, develop and execute a sufficient financing plan for future operations and receive continued financial support from shareholders and other providers of finance.

The consolidated financial statements do not reflect the adjustments, if any, or changes in presentation that may be necessary should the Company not be able to continue on a going concern basis.

All currency amounts in the accompanying financial statements and this management discussion and analysis are in Canadian dollars unless otherwise noted.

The outbreak of the coronavirus, also known as “COVID-19,” spread across the globe and is impacting worldwide economic activity. Government authorities have implemented emergency ‎ measures to mitigate the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods, and social distancing, have caused material disruption to business globally. Governments and central banks reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

| 2 |

| --- |

DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Non-GAAPMeasures and Additional GAAP Measures

Throughout this document, reference is made to “gross margin” and “working capital”, which are non-IFRS measures. Management believes that gross margin, defined as revenue less operating expenses, is a useful supplemental measure of operations. Management believes that working capital, defined as current assets less current liabilities, is an indicator of the Corporation’s liquidity and its ability to meet its current obligations. Readers are cautioned that these non-IFRS measures may not be comparable to similar measures used by other companies. Readers are also cautioned not to view these non-IFRS financial measures as an alternative to financial measures calculated in accordance with International Financial Reporting Standards (“IFRS”).

CoreBusiness and Strategy

Draganfly creates quality, cutting-edge unmanned and remote data collection and analysis platforms and systems that are designed to revolutionize the way companies do business. The Company is incorporated under the British Columbia Business Corporations Act and has its registered office located at 2800 – 666 Burrard Street, Vancouver, BC, V6C 2Z75 with a head office at 2108 St. George Avenue, Saskatoon, SK, S7M 0K7.

Recognized as being at the forefront of technology for two decades, Draganfly is an award-winning, industry-leading manufacturer, contract engineering, and product development company within the commercial UAV (unmanned aerial vehicles) space serving the public safety, agriculture, industrial inspections, and mapping and surveying markets. More recently, the Company’s offering expanded to include the health/telehealth field providing illness detection, social monitoring solutions, and sanitary spraying services relating to the ongoing COVID-19 pandemic. Draganfly is a company driven by passion, ingenuity, and the need to provide efficient solutions and first-class services to its customers around the world with the goal of saving time, money, and lives.

Founded in 1998, Draganfly is recognized as the first commercial multi-rotor manufacturer and has a legacy for its innovation and superior customer service. The company has sold products and services to over 50 countries.

Draganfly can provide its customers with an entire suite of products and services that include quad-copters, fixed-wing aircrafts, ground based robots, hand held controllers, flight training, software used for tracking, live streaming, and data collection. The integrated UAV system is equipped for automated take-offs and landings with altitude and return to home functions as well as in-house created survey software. Draganfly’s standard features combined with custom fit camera payloads ranging from multi-spectral, hyper-spectral, LIDAR, thermal, and infrared allows Draganfly to offer a truly unique solution to clients.

With 23 issued and one pending fundamental UAV patents in the portfolio, Draganfly will continue to expand and grow their intellectual property portfolio.

| 3 |

| --- |

DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

In addition, Draganfly has launched a health/telehealth platform. The initial focus is a COVID-19 screening set of technologies that remotely detect a number of key underlying respiratory symptoms, whereas the same technology stack enables true remote telehealth features. Further, it is offering sanitary spraying services to any indoor or outdoor public gathering space such as sports auditoriums and fields to provide an additional level of protection against the spread of contagious viruses such as COVID-19.

Historically, the main business of the Company was to operate as a manufacturing company offering commercial UAVs directly to its customer base across various industry verticals. The Company has evolved to offer engineering procurement for certain customers in a vertical that is not currently served, such as military applications. The rationale is three-fold: engage in long term contracts that tend to be recurring in nature, gain exposure to an industry that the Company otherwise did not have access to, and leverage our innovation learnings into other products that can be sold in other industries.

Draganfly works with its customers to customize a product or platform from idea research and development (R&D) to completion and testing. A work plan is created with timelines and budget which includes materials, travel, testing, and engineering time. This plan is signed off on by the customer before work begins. To date, the majority of this work is considered proprietary and secret in nature.

With its acquisition of Dronelogics, the Company has further broadened its scope to provide non-OEM products along with services that it did not typically offer before.

On March 9, 2021, the Company announced that it completed the final closing of its Regulation A+ Offering of units sold pursuant to the Company’s Regulation A+ offering circular (the “Offering Document”) filed with the U.S. Securities and Exchange Commission. The Company issued 25,771,465 units (pre-consolidation) at the offering price set out in the Offering Document for gross proceeds in the ‎amount of $15,504,135 (US$12,112,606) in the final closing. Each unit is comprised of one common share of the Company ‎‎and one common share purchase warrant, with each warrant entitling the ‎holder to acquire one common share at a price of US$0.71 (pre-consolidation) per common share for period of two years from the date of issuance. ‎The common shares and warrants issued in connection with the offering are subject to a nine month ‎hold period.‎ In total, the Company issued 35,000,000 units under its Offering Document for aggregate gross proceeds of US$16,450,000.

On July 30, 2021, the Company’s shares began trading on the Nasdaq Capital Market (the “Nasdaq”) under the symbol “DPRO”. The Company’s shares continue to trade on the CSE, however, they now trade under the symbol “DPRO”.

In order to become compliant with NASDAQ regulations, the company also underwent a stock consolidation. Effective July 29, 2021, the Company consolidated its issued and outstanding common shares on a 5 to 1 basis, which resulted in 27,045,909 common shares outstanding post-consolidation. References to common shares, options, warrants, and RSUs in this MD&A are unadjusted and represent the original issuances, grants, forfeitures, cancellations, or exercises unless noted otherwise.

Additional information relating to the Company may be found at the Company’s website, www.draganfly.com.

2021Q3 Highlights

●	2021 Q3 Total Revenues of $1,896,992 with Product Sales of $1,351,517

Although, the Company’s products are still well regarded in the industry, the commercial UAV space as a whole has been impacted by lower priced consumer drones that can now offer similar functionality. The Company recognized an opportunity to address this market by acquiring Dronelgogics, a company that among other things, resells lower priced, third party drones as well as other third party products such as LiDAR sensors. The third quarter of 2021 revenues increased by $443,087 from $1,453,905 in the third quarter of 2020 to $1,896,992 with the bulk of this revenue coming from product sales. Engineering services revenue of $133,719 was up substantially year over year in the third quarter of 2021 as the third quarter of 2020 had the impact from one of the Company’s Engineering Services customers that was affected by the pandemic. Drone services sales of $411,756 made up the balance of the revenues.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

●	Gross Margins were up 2.2% in 2021 Q3 Compared to 2020 Q3

This quarter’s product mix favoured higher gross margins than the same period a year ago. In the third quarter of 2021, the Company’s total gross margin was 40.8% vs 38.5% in the same period in 2020.

●	Company Diversified its Product and Services Offering with Acquisition

Given the Company’s impressive history and deep engineering talent, a natural evolution was to outsource in-house capabilities to customers. Doing this leverages the Company’s core skill set of innovation that tends to lead to future projects, bringing in more consistent revenue. With its recent acquisition, the Company has increased its scope of products and services to include non-OEM products and drone as a service type work. This has proved beneficial during the current pandemic as not all services are impacted the same way so having a larger breadth of products and services, in part mitigates some risk for the Company.

●	Company Broadens its Services to Include Health Vertical in the Face of Global Pandemic

Through its recently purchased Vital Intelligence assets and Varigard partnership, the Company recently added health monitoring and prevention to its product and service offering. Securing some key clients in this business line was key to proving out this new vertical. These clients were important for validation of this relatively new technology, but more importantly demonstrates the Company’s ability to evolve and offer products and services that have global applicability.

●	Risks Related to Operations

The Company’s UAVs are sold in rapidly evolving markets. The commercial UAV market is in early stages of customer adoption. Accordingly, the Company’s business and future prospects may be difficult to evaluate. The Company cannot accurately predict the extent to which demand for its products and services will increase, if at all. The challenges, risks and uncertainties frequently encountered by companies in rapidly evolving markets could impact the Company’s ability to do the following:

●	generate<br> sufficient revenue to maintain profitability;
●	acquire<br> and maintain market share;
●	achieve<br> or manage growth in operations;
●	develop<br> and renew contracts;
●	attract<br> and retain additional engineers and other highly qualified personnel;
●	successfully<br> develop and commercially market new products;
●	adapt<br> to new or changing policies and spending priorities of governments and government agencies; and
●	access<br> additional capital when required and on reasonable terms.

For further and more detailed risk disclosure, please reference Business Risks at the end of this MD&A.

Outlookand Guidance

This Outlook and Guidance contains forward-looking statements that the Company does not intend, and does not assume any obligation, to update, except as required by law. The forward-looking information and statements may include:

●	The<br> current economic climate and its effect on the Company’s client base business;
●	The<br> Company’s ability to successfully acquire new customers;
●	The<br> Company’s ability to successfully implement its technology;
●	Management’s<br> assumptions regarding the sustainability of recurring revenue streams and the Company’s expected profitability; and
●	Management’s<br> outlook and guidance contains forward looking statements of the Company’s ability to penetrate the US and international client<br> base with its products and services and continue its penetration in the Canadian market.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

The Company believes that drone regulations are gradually loosening which should lead to more revenue opportunities from a greater pool of customers. With the Company more capitalized and having easier access to funds in the public markets on both sides of the border, the Company will increasingly focus on some of its growth initiatives in the US, Canada, and abroad. Operationally, having more capital will help the Company expand and diversify its engineering, drone, and health services businesses. This will require more human resources from an oversight, sales, and engineering perspective and the Company anticipates adding additional staff to accommodate these plans. Further, the Company will continue to focus on innovation, product development, and expanding its hardware offerings opportunistically into niche segments of the UAV and related sectors. Finally, the Company has considered providing various other non-engineering services and it may make more sense to buy an existing industry player than to build out this offering. With the Company now also listed on the Nasdaq, it will open up further opportunities to use its Common Shares as a currency for potential acquisitions. The Company expects to be active in this regard reviewing partnerships, investments, and acquisitions in the current fiscal year and the near future.

SelectedFinancial Information

The following selected financial data has been extracted from the unaudited condensed consolidated interim financial statements, prepared in accordance with International Financial Reporting Standards, for the periods indicated and should be read in conjunction with the unaudited condensed consolidated interim financial statements. All earnings per share calculations are shown post-consolidation.

						Nine months ended September 30,
			2020			2021			2020
Total revenues	1,896,992		$	1,453,905		$	5,418,600		$	2,877,502
Gross Profit (as a % of revenues)	40.8	%		38.5	%		37.2	%		49.7	%
Net income (loss)	23,840,499			(2,450,311	)		(29,105,655	)		(4,522,938	)
Net income (loss) per share ()
- Basic	0.79			(0.16	)		(1.18	)		(0.31	)
- Diluted	0.74			(0.16	)		(1.18	)		(0.31	)
Comprehensive income (loss)	23,975,400			(2,451,543	)		(29,034,603	)		(4,524,069	)
Comprehensive income (loss) per share ()
- Basic (post-consolidation)	0.79			(0.16	)		(1.18	)		(0.31	)
- Diluted (post-consolidation)	0.75			(0.16	)		(1.18	)		(0.31	)
Change in cash and cash equivalents	8,802,746		$	(844,909	)	$	25,833,262		$	(1,779,056	)

All values are in US Dollars.

The net income (loss) and comprehensive income (loss) for the three and nine months ended September 30, 2021 include a change in fair value of derivative liability for USD warrants of a gain of $30,562,044 and a loss of $15,278,305, respectively, and would otherwise be losses of $6,721,545 and $13,827,350 for the net loss, and $6,586,644 and $13,756,298 for the comprehensive loss, respectively.

As at	September 30,<br> <br>2021		December 31,<br><br> <br>2020
Total assets	$	60,240,843	$	7,100,567
Working capital		20,510,097		1,214,371
Total non-current liabilities		253,527		104,885
Shareholders’ equity	$	41,289,675	$	3,848,205
Number of shares outstanding (post-consolidation)		32,156,950		17,218,672

Shareholders’ equity and working capital as at September 30, 2021 includes a fair value of derivative liability for USD warrants of $16,890,998 and would otherwise be shareholders’ equity of $58,180,673 and working capital of $37,401,095.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Resultsof Operations

Revenue

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Product sales	$	1,351,517	$	1,109,426	$	3,968,807	$	1,866,222
Drone services		411,756		344,479		1,073,440		534,088
Custom engineering services		133,719		-		376,353		477,192
Total revenue	$	1,896,992	$	1,453,905	$	5,418,600	$	2,877,502

Total revenue for the three months ended September 30, 2021 increased by $443,087 or 30.5% as compared to the same period in 2020. The increase in revenue is largely due to the Company’s acquisition of Dronelogics and the retail sales and services business that they brought partially offset by a decrease in Custom Engineering services due to the downturn caused by COVID-19. Product sales increased $242,091 or 21.8% in the third quarter of 2021 as compared to the same period in 2020 primarily due to third party product sales generated from Dronelogics.

Total revenue for the nine months ended September 30, 2021 increased by $2,541,098 or 88.3% as compared to the same period in 2020. The increase in revenue is largely due to the Company’s acquisition of Dronelogics and the retail sales and services business that they brought partially offset by a decrease in Custom Engineering services due to the downturn caused by COVID-19. Product sales increased by $2,102,585 or 112.7% in the first nine months of 2021 as compared to the same period in 2020 primarily due to third party product sales generated from Dronelogics.

Draganfly ‎Innovations Inc.’s (“Draganfly Innovations”) primary custom engineering customer is domiciled in the US and was shut down and ‎reduced a number of its projects. As a result, there was no contribution from this customer after ‎March 2020.

As at April 30, 2020, the Issuer completed its acquisition of Dronelogics. Therefore, the September 30, 2020 results only include five months of contributions from Dronelogics.

Costof Goods Sold / Gross Margin

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Cost of goods sold	$	(1,123,942	)	$	(893,441	)	$	(3,401,950	)	$	(1,448,420	)
Gross profit	$	773,050		$	560,464		$	2,016,650		$	1,429,082
Gross margin (%)		40.8	%		38.5	%		37.2	%		49.7	%

Gross profit is the difference between the revenue received and the direct cost of that revenue. Gross margin is gross profit divided by revenue and is often presented as a percent.

For the three months ended September 30, 2021, the Company’s Gross Profit increased by $212,586 or 37.9%. As a percentage of sales, gross margin increased from 38.5% in 2020 to 40.8% in 2021.

For the nine months ended September 30, 2021, the Company’s Gross Profit increased by $587,568 or 41.1%. As a percentage of sales, gross margin decreased from 49.7% in 2020 to 37.2% in 2021.

Engineering service work consists of the design and customization of various UAV type products for the Company’s clients. Further, this service work tends to have higher gross margins than straight product sales. With this business line currently impacted by the pandemic, gross profit margins were down as this shift in gross margin is due to the lower margin product sales that the Company acquired with Dronelogics.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Selling,General, and Administrative (SG&A)

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Insurance	$	1,467,645	$	12,207	$	1,504,204	$	38,269
Office and Miscellaneous		2,380,907		933,196		5,345,851		2,150,772
Professional Fees		1,751,478		767,376		3,462,650		1,503,905
Research and development		36,713		283,823		123,414		314,761
Share-based payments		1,260,061		766,510		3,141,824		2,085,571
Travel		49,171		1,121		109,203		18,175
Wages and salaries		789,868		300,869		1,843,795		956,080
Total	$	7,735,843	$	3,065,102	$	15,530,941	$	7,067,533

For the three months ended September 30, 2021, Selling, General, and Administrative expenses in 2021 increased by 152.4%, from $3,065,102 in 2020 to $7,735,843 in 2021. The largest contributor to the increase is marketing and investor relations costs in the office and miscellaneous line as well as Directors and Officers insurance cost and share-based payments. Some of the other SG&A expenses such as professional fees increased due to increased accounting and legal work around preparation for the Nasdaq uplist along with increases in wages and salaries due to the company growing in size.

For the nine months ended September 30, 2021, Selling, General, and Administrative expenses in 2021 increased by 119.8%, from $7,067,533 in 2020 to $15,530,941 in 2021. The largest contributor to the increase is marketing and investor relations costs in the office and miscellaneous line as well as Directors and Officers insurance cost and share-based payments. Some of the other SG&A expenses such as professional fees increased due to increased accounting and legal work around the Reg A financing, Nasdaq uplist, increased costs associated with being listed on the Nasdaq, along with increases in wages and salaries due to the company growing in size.

Netand Comprehensive Income (Loss)

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Loss from operations	$	(7,233,907	)	$	(2,541,539	)	$	(14,170,859	)	$	(5,715,892	)
Change in fair value of derivative liability		30,562,044			-			(15,278,305	)		-
Finance and other costs		739			(10,298	)		(9,968	)		(21,155	)
Foreign exchange gain (loss)		571,833			(88,874	)		496,932			(34,279	)
Gain on settlement of debt		-			(38,879	)		-			28,614
Income from government assistance		1,233			-			22,894			-
Other income (loss)		(14	)		(992,780	)		32,223			(2,285	)
Unrealized gain on investments available for sale		(61,429	)		-			(198,572	)		-
Net income (loss)		23,840,499			(2,450,311	)		(29,105,655	)		(4,522,938	)
Taxes		-			-			(82,820	)		-
Cumulative translation differences		134,901			(1,232	)		153,872			(1,131	)
Comprehensive income (loss)	$	23,975,400		$	(2,451,543	)	$	(29,034,603	)	$	(4,524,069	)

For the three months ended September 30, 2021, the Company recorded a comprehensive income of $23,975,400 compared to a comprehensive loss of $2,451,543 in 2020. The net income and comprehensive income for the three months ended September 30, 2021, include a gain in fair value of derivative liability for USD warrants of $30,562,044 and would otherwise be losses of $6,721,545 and $6,586,644, respectively. The other largest contributors to the year over year increase is the insurance, share-based payments and wages and salaries partially offset by increased revenues.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

For the nine months ended September 30, 2021, the Company recorded a comprehensive loss of $29,034,603 compared to $4,524,069 in 2020. The net loss and comprehensive loss for the nine months ended September 30, 2021, include a loss in fair value of derivative liability for USD warrants of $15,278,305 and would otherwise be $13,827,350 and $13,756,298, respectively. The other largest contributors to the year over year increase is the increased insurance, marketing and investor relations costs, share-based payments, and professional fees relating to the Regulation A+ and Nasdaq financings partially offset by increased revenues.

Authorizedshare capital

Unlimited number of common shares without par value.

Issuedshare capital

During the nine months ended September 30, 2021,

-	The<br> Company issued 7,902,624 (pre-consolidation) common shares for the exercise of warrants for $3,951,312.
-	The<br> Company issued 749,997 (pre-consolidation) common shares for the vesting of Restricted Share Units.
-	The<br> Company issued 1,964,995 (pre-consolidation) common shares for the exercise of stock options for $987,248.
-	The<br> Company issued 75,000 (pre-consolidation) common shares in lieu of cash.
-	The<br> Company issued 32,443,457 (pre-consolidation) units for the Regulation A+ financing in the United States. Each unit is comprised<br> of one common share and one share purchase warrant. These warrants have an exercise price of $0.71 USD per warrant (pre-consolidation)<br> , each convert to one common share, and have a life of two years.
-	The<br> Company issued 6,000,000 (pre-consolidation) units for the acquisition of Vital Intelligence. Each unit is comprised of one common<br> share and one warrant. These warrants have an exercise price of $2.67 (pre-consolidation) per warrant , each convert to one common<br> share, and have a life of two years.
-	The<br> Company acquired 108,183,525 (pre-consolidation) shares in a 5:1 share consolidation transaction.
-	The<br> Company issued 5,095,966 common shares in a private placement for $25,538,213.
-	The<br> Company issued 15,075 commons shares for the exercise of warrants for $63,924.

DronelogicsAcquisition

All share, RSU, and stock option numbers noted in relation to this transaction are pre-consolidation.

On April 30, 2020, the Company closed the share purchase agreement with the shareholders of Dronelogics, whereby the Company acquired all of the issued and outstanding shares in the capital of Dronelogics, excluding the cinematography division, for a consideration of $2,000,000, plus the amount, if any, by which the estimated closing date working capital exceeds the target closing working capital (the “Transaction”). The consideration was paid $500,000 in cash, subject to working capital adjustment and 3,225,438 common shares in the capital of the Company at a deemed price of $0.50 per share. In addition, the Company welcomed Mr. Hannewyk as a member of the Board.

In connection with the Transaction, the Company paid fees of $160,000 to certain advisors; consisting of $100,000 by way of 200,000 in shares at a deemed price of $0.50 per share and as to $60,000 in cash or shares at a deemed price of $0.50 per share. At closing, the Company (i) granted 445,000 incentive stock options to certain employees of Dronelogics pursuant to the Company’s share compensation plan, exercisable at a price equal to closing price of the shares on the CSE on January 31, 2020. The options shall have a term of 10 years and 375,000 vest in three equal tranches, on the grant date and first and second anniversaries of the date of grant while 70,000 vest on the first anniversary of the grant date, and (ii) awarded 375,000 RSUs to certain directors and officers of Dronelogics. RSUs were awarded to certain directors and officers of Dronelogics pursuant to the Company’s share compensation plan. The RSUs shall vest in three equal tranches, on the first, second and third anniversaries of the date of award.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

The purchase price allocation (“PPA”) is as follows:

Number of shares of Draganfly Inc.		3,225,438
Fair value of common shares	$	0.83
Fair value of shares of Draganfly Inc.	$	2,677,114
Present value of the fair value of shares of Draganfly Inc.		2,178,960
Cash portion of purchase price		500,000
Total	$	2,678,960
Tangible assets acquired
---	---	---	---
Cash	$	42,593
Accounts receivable		98,852
Inventory		629,684
Prepaids and deposits		93,997
Other current assets		3,014
Capital assets		54,946
Right-of-use assets		83,428
Accounts payable and accrued liabilities		(222,766	)
Customer deposits		(245,959	)
Loans		(245,752	)
Other current liabilities		(8,437	)
Lease liabilities		(87,203	)
		196,397
Identifiable intangible assets
Customer relationships		197,000
Website		119,000
		316,000
Goodwill		2,166,563
Total consideration	$	2,678,960

VitalIntelligence Acquisition

All unit numbers noted in relation to this transaction are pre-consolidation.

On March 25, 2021, the Company acquired the assets of Vital Intelligence Inc. (“Vital”) for consideration of: (a) a cash payment of $500,000 with ‎‎$50,000 paid upon execution of the asset purchase agreement, $200,000 to be paid at closing and ‎‎$250,000 to be paid on the six-month anniversary date of ‎closing; and (b) ‎6,000,000 units of the ‎Company with each unit being comprised of one common share of the Company and one common share ‎purchase warrant (the “Acquisition”). Each warrant will entitle the holder to acquire one common share for a period of 24 ‎months following closing at an exercise price of $2.67 per common share and the Company will be able ‎to accelerate the expiry date of the warrants after one year in the event the underlying common shares ‎have a value of at least 30% greater than the exercise price of the warrants. The units will be held in ‎escrow following closing with 1,500,000 units being released at closing and the remainder to be released ‎upon the Company reaching certain revenue milestones received from the purchased assets. On August 19, 2021, the parties agreed to reduce the final payment from $250,000 to $227,984 due to certain assets listed in the purchase agreement had not been delivered by Vital.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

The units of the Company are to be releasable from escrow in accordance with the terms and conditions of the Escrow Agreement, as follows:

a)	1,500,000<br> units shall be released on the closing date;
b)	1,500,000<br> units shall be released from escrow upon the Vital assets earning revenue in the aggregate amount of $2,000,000;
c)	1,500,000<br> units shall be released from escrow upon the Vital assets earning revenue in the aggregate amount of $4,000,000; and
d)	1,500,000<br> units shall be released from escrow upon the Vital assets earning revenue in the aggregate amount of $6,000,000.

The 4,500,000 units will be forfeited and cancelled within two years of the closing if the Company does not meet the revenue milestones.

Vital Intelligence has developed a suite of products that is designed to maximize the use of its technology by serving a variety of different market segments and sectors:

-	Drone<br> Vital Sign Detection: Video from a drone is analyzed and can provide an individuals’ heart rate, respiratory rate, and also<br> detect coughing. The data is processed via either a local or cloud storage service in real or near-real time.
-	Drone<br> Social Distancing Detection: Video cameras attached to drones collect data which is then used to determine social distancing. The<br> data is processed via either a local or cloud storage service in real or near-real time.
-	Thermography<br> Kiosk: This product, also branded as Safe Set Solution, is a moveable kiosk (consisting of a thermal detection camera, laptop and<br> stand) to provide thermal detection and reporting systems. Kiosk is able to be placed in entryways or throughways to capture temperature<br> readouts of passers-by.
-	Thermography<br> Detection Camera System: This group of products is a stationary camera system, or systems of networked cameras aimed at critical<br> entryways or locations designed to capture core-body temperature of individuals entering a space. Algorithms read video feeds and<br> allow for company or facility use decisions to be made. An example would be capturing temperature readouts from individuals and then<br> integrating that data into a company’s employee badge systems for compliance and monitoring as well as door locking systems<br> to grant access to a space.
-	Social<br> Distancing Camera System: This product is a stationary camera system, or system of networked cameras aimed at high traffic areas<br> in order to capture data on social distancing. Information is provided via overlay on capture footage. The technology can be used<br> on archived or real-time video footage to assist community health workers in predicting outbreaks of infections.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

The PPA is as follows:

Number of units of Draganfly Inc.		6,000,000
Fair value of units	$	2.88
Fair value of units of Draganfly Inc.	$	17,292,857
Fair value of cash portion of purchase price		488,659
Cash discount for inventory not received		(22,016	)
Total	$	17,759,500
Identifiable intangible assets
---	---	---	---
Brand	$	540,000
Software		1,711,000
		2,251,000
Goodwill		15,530,516
Goodwill adjustment for inventory not received		(22,016	)
Total consideration	$	17,759,500

The Company estimated the fair value as follows:

●	Brand<br> based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 1.0% and discount rate<br> of 40% per annum.
●	Software<br> based on an income approach, specifically relief from royalty methodology, using a reasonable royalty rate of 5.0% and discount rate<br> of 40% per annum.

Summaryof Quarterly Results

The following selected quarterly financial data has been extracted from the financial statements, prepared in accordance with International Financial Reporting Standards.

Total revenue for the three months ended September 30, 2021 increased by $443,087 or 30.5% as compared to the same period in 2020. The increase in revenue is largely due to the Company’s acquisition of Dronelogics Systems Inc. and the retail sales and services business that they brought partially offset by a decrease in Custom Engineering services due to the downturn caused by COVID-19. Product sales increased by $242,091 or 21.8% in the third quarter of 2021 as compared to the same period in 2020 primarily due to third party product sales generated from Dronelogics.

Operating expenses increased 158.0% compared to the same period in 2020 due to higher insurance, marketing, investor relations costs, professional fees, and share-based payments after going public. The other income and comprehensive income for the third quarter of 2021 include a change in fair value of derivative liability for USD warrants of $30,562,044 and would otherwise be income of $512,362 and loss of $6,586,644, respectively. All earnings per share calculations are shown post-consolidation.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

	2021 Q3			2021 Q2			2021 Q1			2020 Q4
Revenue	$	1,896,992		$	1,981,872		$	1,539,736		$	1,486,009
Cost of goods sold	$	(1,123,942	)	$	(1,253,279	)	$	(1,024,729	)	$	(1,155,491	)
Gross profit	$	773,050		$	728,593		$	515,007		$	330,518
Gross margin – percentage		40.8	%		36.8	%		33.4	%		22.2	%
Operating expenses	$	(8,006,957	)	$	(3,340,952	)	$	(4,839,600	)	$	(3,359,508	)
Operating income (loss)	$	(7,233,907	)	$	(2,612,359	)	$	(4,324,593	)	$	(3,028,990	)
Operating loss per share - basic	$	(0.24	)	$	(0.10	)	$	(0.23	)	$	(0.18	)
Operating loss per share - diluted	$	(0.22	)	$	(0.10	)	$	(0.23	)	$	(0.18	)
Other income (expense)	$	31,074,406		$	(5,409,861	)	$	(40,599,341	)	$	(713,885	)
Other comprehensive income	$	134,901		$	9,684		$	9,287		$	1,235
Comprehensive income (loss)	$	23,975,400		$	(8,095,356	)	$	(44,914,647	)	$	(3,741,640	)
Comprehensive income (loss) per share - basic	$	0.79		$	(0.30	)	$	(2.40	)	$	(0.23	)
Comprehensive income (loss) per share - diluted	$	0.75		$	(0.30	)	$	(2.40	)	$	(0.23	)

	2020 Q3			2020 Q2			2020 Q1			2019 Q4
Revenue	$	1,453,905		$	926,540		$	497,057		$	491,520
Cost of goods sold	$	(893,441	)	$	(495,193	)	$	(59,786	)	$	(42,401	)
Gross profit	$	560,464		$	431,347		$	437,271		$	449,119
Gross margin – percentage		38.5	%		46.6	%		88.0	%		91.4	%
Operating expenses	$	(2,852,003	)	$	(2,387,738	)	$	(1,655,233	)	$	(2,983,115	)
Operating loss	$	(2,291,539	)	$	(1,956,391	)	$	(1,217,962	)	$	(2,533,996	)
Operating loss per share - basic	$	(0.15	)	$	(0.13	)	$	(0.09	)	$	(0.19	)
Operating loss per share - diluted	$	(0.15	)	$	(0.13	)	$	(0.09	)	$	(0.19	)
Other income	$	91,228		$	987,872		$	113,854		$	506,080
Other comprehensive income (loss)	$	(1,232	)	$	(13,713	)	$	13,814		$	-
Comprehensive loss	$	(2,451,453	)	$	(982,232	)	$	(1,090,294	)	$	(2,027,916	)
Comprehensive loss per share - basic	$	(0.14	)	$	(0.06	)	$	(0.08	)	$	(0.15	)
Comprehensive loss per share - diluted	$	(0.14	)	$	(0.06	)	$	(0.08	)	$	(0.15	)

Liquidityand Capital Resources

The Company’s liquidity risk is derived from its loans, accounts payable, and accrued liabilities, as it may encounter difficulty discharging those obligations, but the Company endeavors to mitigate that risk through the careful management of its debt holders and the assertive pursuit of capital inflow for its operations. The Company’s working capital of $20,510,097, as at September 30, 2021, would be increased to $37,401,095, if the non-cash liability for outstanding USD warrants were excluded. The Company’s working capital as at December 31, 2020 was $1,214,371.

The Company considers the items included in capital to include shareholders’ equity. The Company manages its capital structure and makes adjustments to it in light of changes in economic and business conditions, financing environment, and the risk characteristics of the underlying assets. The Company does not have any contracted or committed capital expenditures as of the date of these financial statements. The Company utilizes its credit card facilities from time to time to make various purchases for their operations. The Company may need to raise additional capital during the next twelve months and beyond to support current operations, planned development, and new initiatives. Management intends to finance operating costs over the next twelve months predominantly with cash on hand and with the potential issuance of securities such as the private placement of common shares and convertible debentures. Further, in order to maintain or adjust its capital structure, the Company may issue new shares, new debt, or scale back the size and nature of its operations. The Company is not subject to externally imposed capital requirements. As at September 30, 2021, shareholders’ equity was $41,289,675 and at December 31, 2020, shareholder’s equity was $3,848,205. The Company’s shareholder’s equity would be $58,180,673 if the non-cash liability for outstanding USD warrants were excluded.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

On February 5, 2021, the Company closed a second tranche of its Regulation A+ Offering for gross proceeds in the amount of $4,003,195 (US$3,135,838). On March 9, 2021, the Company announced that it completed the final closing of its Regulation A+ offering of units sold pursuant to the Company’s Regulation A+ offering circular (the “Offering Document”) filed with the U.S. Securities and Exchange Commission. The Company issued 25,771,465 units (pre-consolidation) at the offering price set out in the Offering Document for gross proceeds in the ‎amount of $15,504,135 (US$12,112,606) in the final closing. Each unit is comprised of one common share of the Company ‎‎and one common share purchase warrant, with each warrant entitling the ‎holder to acquire one common share at a price of US$0.71 (pre-consolidation) per common share for period of two years from the date of issuance. ‎The common shares and warrants issued in connection with the offering are subject to a nine month ‎hold period.‎ In total, the Company issued 35,000,000 (pre-consolidation) units under its Offering Document for aggregate gross proceeds of US$16,450,000.

On August 3, 2021, the Company announced that it closed on gross proceeds of a US$20,000,000 share offering that was filed with the U.S. Securities and Exchange Commission as part of its successful Nasdaq uplist campaign. The Company issued 5,000,000 shares at US$4.00.

We expect, from time to time, to evaluate the acquisition of businesses, intellectual property, products and technologies for which a portion of the net proceeds may be used. There is always the potential that any acquisition or investment in a company or product has a negative impact on future cash flows of the Company.

Our plan of operations for the next year includes the following: (i) hiring engineers to perform more engineering service work, to complete contracts on a timelier basis, and to perform R&D for the Company’s next generation of products; (ii) hiring sales/marketing employees for our product lines and engineering services work; (iii) hiring sales/marketing employees for further expansion into services (e.g. drone as a service); (iv) diversifying and expanding business lines organically and by potential acquisitions; (v) updating machinery used for manufacturing and production; (vi) continuing to patent innovative ideas for new products; and (vii) developing and increasing current product offering to various niche industries that are not currently being served.

This expected use of the net proceeds from the Regulation A+ Offering and Nasdaq financing represents our intentions based upon our current financial condition, results of operations, and conditions. As of the date of this MD&A, we cannot predict with certainty all of the particular uses for the net proceeds received from the closing of the Regulation A+ Offering and Nasdaq financing. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors.

Off-BalanceSheet Arrangements

The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have, a current or future effect on our results of operations, financial condition, revenues or expenses, liquidity, capital expenditures or capital resources.

ContractualObligations

As of September 30, 2021, and as of the date of this MD&A, and in the normal course of business, the following is a summary of the Company’s material obligations to make future payments, representing contracts, and other commitments that are known and committed.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

On December 1, 2020, the Company entered into an amendment for the lease agreement, where the lease was amended with a change in annual payments. As a result of IFRS 16, the right of use asset and lease liability were setup and recorded as follows:

Rightof Use Asset

	Total
Cost
Balance at January 1, 2020	$	159,539
Lease acquired in the Acquisition		83,428
Balance at December 31, 2020	$	242,967
Additions		195,281
Lease removal		(7,092	)
Balance at September 30, 2021	$	431,156
Accumulated depreciation
Balance at January 1, 2020	$	29,545
Charge for the period		69,003
Balance at December 31, 2020	$	98,548
Historical correction		7,152
Charge for the period		78,551
Balance at September 30, 2021	$	184,251
Net book value:
December 31, 2020	$	144,419
September 30, 2021	$	246,905

LeaseLiability

	Total
Balance at January 1, 2020	$	136,073
Leases acquired in the Acquisition		87,203
Interest expense		18,290
Lease Payments		(83,442	)
Balance at December 31, 2020	$	158,124
Addition		166,671
Historical correction		22,043
Interest expense		16,993
Lease payments		(92,891	)
Lease removal		(7,645	)
Balance at September 30, 2021		263,295
Which consists of:
Current lease liability	$	98,114
Non-current lease liability		165,181
Balance at September 30, 2021	$	263,295

RelatedParty Transactions

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Tradepayables and accrued liabilities:

On Aug 1, 2019, the Company entered in a business services agreement (the “Agreement”) with Business Instincts Group (“BIG”), a company that Cameron Chell, CEO and director has a material interest in that he previously controlled, to provide: corporate development and governance, strategic facilitation and management, general business services, office space, corporate business development video content, website redesign and management, and online visibility management. The services are provided by a team of up to six consultants and the costs of all charges are based on the fees set in the Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the nine months ended September 30, 2021, the company incurred fees of $198,600 compared to $119,750 in 2020. As at September 30, 2021, the Company was indebted to this company in the amount of $nil (December 31, 2020 - $nil).

On October 1, 2019, the Company entered into an independent consultant agreement (“Consultant Agreement”) with 1502372 Alberta Ltd, a company controlled by Cameron Chell, CEO and director, to provide executive consulting services to the Company. The costs of all charges are based on the fees set in the Consultant Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the nine months ended September 30, 2021, the Company incurred fees of $190,225 compared to $84,150 in 2020. As at September 30, 2021, the Company was indebted to this company in the amount of $73,500 (December 31, 2020 - $321,741).

On July 3, 2020, the Company entered into an executive consultant agreement (“Executive Agreement”) with Scott Larson, a director of the Company, to provide executive consulting services, as President, to the Company. The costs of all charges are based on the fees set in the Executive Agreement and are settled on a monthly basis. The Company records these charges under Professional Fees. For the nine months ended September 30, 2021, the Company incurred fees of $143,191 compared to $ nil in 2020. As at September 30, 2021, the Company was indebted to this company in the amount of $58,915 (December 31, 2020 - $153,887).

As at September 30, 2021, the Company had $142,415 (December 31, 2020 - $475,628) payable to related parties outstanding that were included in accounts payable. The balances outstanding are unsecured, non-interest bearing and due on demand.

Keymanagement compensation

	For<br> the three months ended September 30,				For<br> the nine months ended September 30,
	2021		2020		2021		2020
Director fees	$	91,928	$	-	$	263,148	$	-
Management fees paid to a<br> company controlled by CEO and director		84,444		73,500		190,225		203,900
Management fees paid to a<br> company controlled by the President and director		56,223		-		143,191		-
Management fees paid to a<br> company controlled by a former director		45,000		45,000		135,000		120,000
Salaries		197,882		111,292		470,240		245,006
Salaries paid to the former<br> owner of the Company		-		23,051		-		86,097
Share-based payments		627,063		505,702		1,932,309		1,145,141
	$	1,102,540	$	758,545	$	3,134,113	$	1,800,144

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

ShareCapital

Commonshares issued

Number of common shares issued and balances in the table below are shown as pre-consolidation, unless otherwise noted.

			Share<br> Capital
Balance, December 31, 2019	69,670,613		$	27,786,517
Shares issued for exercise of warrants	7,923,875			4,007,130
Shares issued for acquisition	3,225,438			2,178,961
Shares issued as finder’s fees	200,000			100,000
Shares issued for debt settlement	555,409			344,354
Shares issued for financing	3,518,034			2,018,845
Shares issued for exercise of RSUs	999,992			507,497
Balance, December 31, 2020	86,093,361		$	36,943,304
Shares issued for exercise<br> of warrants	7,902,624			3,951,312
Shares<br> issued for acquisition	6,000,000			14,220,000
Shares issued for exercise<br> of RSUs	749,997			396,249
Shares issued for exercise<br> of stock options	1,964,995			1,910,991
Shares<br> issued for financing	32,443,457			18,717,438
Share<br> issue costs	-			(273,169	)
Shares<br> issued in lieu of cash	75,000			198,000
Share consolidation 5:1	(108,183,525	)		-
Shares<br> issued for financing (post-consolidation)	5,095,966			25,538,213
Share<br> issue costs	-			(3,141,574	)
Shares issued for exercise<br> of warrants (post-consolidation)	15,075			68,430
Balance, September 30, 2021	32,156,950		$	98,524,688

Stockoptions

The following is the summary of the Company’s stock option activity. Number of options and weighted average exercise prices in the table below are shown as they were outstanding, forfeited, granted, and exercised, pre-consolidation and post-consolidation:

			Weighted<br> Average Exercise Price
Outstanding, December 31, 2019	3,725,000		$	0.50
Forfeited	(216,668	)		0.50
Granted	2,460,000			0.63
Outstanding, December 31, 2020	5,968,332		$	0.55
Exercised	(1,964,970	)		0.50
Granted	1,110,000			2.15
Consolidation 5:1	(4,090,662	)		-
Granted<br> (post-consolidation)	25,825			4.84
Outstanding, September 30,<br> 2020	1,048,490		$	4.57

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

RestrictedShare Units (RSUs)

The following is the summary of the Company’s RSU activity. Number of RSUs in the table below are shown as they were outstanding, exercised, forfeited, and granted, pre-consolidation and post-consolidation:


Outstanding, December 31, 2019	3,175,000
Exercised	(999,992	)
Forfeited	(341,667	)
Granted	1,240,000
Outstanding, December 31, 2020	3,073,341
Exercised	(749,997	)
Granted	790,000
Consolidation 5:1	(2,490,677	)
Granted<br> (post-consolidation)	190,826
Outstanding, September 30,<br> 2021	813,493

Warrants

During the year ended December 31, 2020 and the nine months ended September 30, 2021, the Company issued warrants (“USD Warrants”) with a USD exercise price. Being in a foreign currency that is not the Company’s functional currency, these USD Warrants are required to be recorded as a financial liability and not as equity. As a financial liability, these USD Warrants are revalued on a quarterly basis to fair market value with the change in fair value being recorded through the Consolidated Statement of Comprehensive Loss. The initial fair value of these USD Warrants was parsed out from equity and recorded as a financial liability.

To reach a fair value of the USD Warrants, a Black Scholes calculation is used, calculated in USD as the Company also trades on the OTCQB. The Black Scholes value per USD Warrant is then multiplied by the number of outstanding warrants and then multiplied by the foreign exchange rate at the end of the period from the Bank of Canada.

Warrant Derivative Liability

Balance at January 1, 2020	$	-
Change in fair<br> value of warrants outstanding		748,634
Balance at December 31, 2020	$	748,634
Change<br> in fair value of warrants outstanding		16,142,364
Balance at September 30,<br> 2021	$	16,890,998

Issue<br> Date			Fair<br> Value at July 29, 2021			Fair<br> Value at December 31, 2020
November 30,<br> 2020	US<br> 0.71	2,556,496	$	3,402,992	2,556,496	$	748,634
February 5, 2021	US<br> 0.71	6,671,992		8,881,192	-		-
March 5, 2021	US<br> 0.71	25,771,465		34,304,799	-		-
		34,999,953	$	46,588,983	2,556,496	$	748,634

All values are in US Dollars.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

On July 29, 2021, the Company underwent a share consolidation at which time the warrants were consolidated on a 5:1 basis. Results of the consolidation are as follows:

Issue<br> Date
November 30,<br> 2020	US<br> 3.55	511,299	511,299
February 5, 2021	US<br> 3.55	1,334,398	-
March 5, 2021	US<br> 3.55	5,154,293	-
		6,999,991	511,299

All values are in US Dollars.

Issue Date			Fair<br> Value at September 30, 2021			Fair<br> Value at December 31, 2020
November 30,<br> 2020	US<br> 3.55	496,234	$	1,174,091	511,299	$	748,634
February 5, 2021	US<br> 3.55	1,334,400		3,157,195	-		-
March 5, 2021	US<br> 3.55	5,154,321		12,195,143	-		-
July 29, 2021	US<br> 5.00	250,000		357,704	-		-
September 14, 2021	US<br> 5.00	4,798		6,865	-		-
		7,239,753	$	16,890,998	511,299	$	748,634

All values are in US Dollars.

The following is the summary of the Company’s warrant activity. Number of warrants and weighted average exercise prices in the table below are shown as they were outstanding, exercised, forfeited, and granted, pre-consolidation and post-consolidation:

			Weighted<br> Average Exercise Price
Outstanding, December 31, 2019	18,051,499		$	0.41
Expired	(7,923,874	)		0.30
Exercised	(600,000	)		0.50
Issued	2,556,496			0.71
Outstanding, December 31, 2020	12,084,121		$	0.59
Exercised	(7,902,624	)		0.50
Granted	38,443,457			1.02
Consolidation 5:1	(34,099,924	)		-
Granted<br> (post-consolidation)	254,798			5.00
Exercised<br> (post-consolidation)	(15,075	)		3.55
Outstanding, September 30,<br> 2021	8,764,753			4.89

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

As at September 30, 2021, the Company had the following warrants outstanding (post-consolidation):

Date<br> issued	Expiry<br> date
November 5,<br> 2019	November 5,<br> 2021	CDN<br> 2.50	325,000
November 30, 2020	November 30, 2022	US<br> 3.55	496,234
February 5, 2021	February 5, 2023	US<br> 3.55	1,134,400
March 5, 2021	March 5, 2023	US<br> 3.55	5,154,321
March 22, 2021	March 22, 2023	CDN<br> 13.35	1,200,000
July 29, 2021	July 29, 2024	US<br> 5.00	250,000
September 14, 2021	September 14, 2024	US<br> 5.00	4,798
			8,764,753

All values are in US Dollars.

The weighted average remaining contractual life of warrants outstanding as of September 30, 2021 was 1.36 years (December 31, 2020 - 0.90 years).

Of the 6,000,000 (1,200,000 post-consolidation) warrants issued on March 22, 2021 with regards to the Vital Intelligence Acquisition, 4,500,000 (900,000 post-consolidation) of the warrants are currently held in escrow, to be released only upon completion of the milestones.

CriticalAccounting Policies and Estimates

Note 2 of the audited consolidated financial statements for the year ended December 31, 2020 describe fully the significant accounting policies used in preparing the financial statements.

Measurement Uncertainty (Use of Estimates)

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the amounts recognized in the consolidated financial statements are:

a.	SR&ED tax credits

The determination of the amount of the Saskatchewan SR&ED tax credit receivable requires management to make calculations based on its interpretation of eligible expenditures in accordance with the terms of the programs. The reimbursement claims submitted by the Company are subject to review by the relevant government agencies. Although the Company has used its best judgment and understanding of the related program agreements in determining the receivable amount, it is possible that the amounts could increase or decrease by a material amount in the near-term dependent on the review and audit by the government agency.

b.	Allowance for uncollectible trade and other receivables

The Company makes use of estimates when making allowances for uncollectible trade and other receivables. The Company evaluates each receivable at year end using factors such as age of receivable, payment history, and credit risk to estimate when determining if an allowance is required, and the amount of the allowance.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

c.	Share-based payment transactions

The Company measures the cost of share-based payment transactions with employees by reference to the fair value of the equity instruments. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining and making assumptions about the most appropriate inputs to the valuation model including the expected lives and forfeiture rates of the share options and volatility of the market value of the underlying shares.

NewPolicies Adopted

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

BusinessRisks

In the normal course of business, the Company’s operations are influenced by a number of internal and external factors and are exposed to risks and uncertainties that can affect its business, financial condition and operating results. The activities of the Company are subject to ongoing operational risks including the performance of key suppliers, product performance, and government and other industry regulations and reliance on information systems, all of which may affect the ability of the Company to meet its obligations. While management believes its innovation and technology make it a leader in the industry, revenue and results may be affected if products are not accepted in the marketplace, are not approved by regulatory authorities, or if products are not brought to market in a timely manner.

The Company will be affected by a number of operational risks and the Company may not be adequately insured for certain risks, including: labour disputes; catastrophic accidents; fires; blockades or other acts of social activism; changes in the regulatory environment; impact of non-compliance with laws and regulations; natural phenomena, such as inclement weather conditions, floods, earthquakes and ground movements. There is no assurance that the foregoing risks and hazards will not result in damage to, or destruction of, the Company’s technologies, personal injury or death, environmental damage, adverse impacts on the Company’s operation, costs, monetary losses, potential legal liability and adverse governmental action, any of which could have an adverse impact on the Company’s future cash flows, earnings and financial condition. Also, the Company may be subject to or affected by liability or sustain loss for certain risks and hazards against which the Company cannot insure or which the Company may elect not to insure because of the cost. This lack of insurance coverage could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.

Resaleof Shares

There can be no assurance that the publicly-traded market price of the Company Shares will be high enough to create a positive return for the existing investors. Further, there can be no assurance that the Company Shares will be sufficiently liquid so as to permit investors to sell their position in the Company without adversely affecting the stock price. In such event, the probability of resale of the Company Shares would be diminished.

As well, the continued operation of the Company will be dependent upon its ability to procure additional financing in the short term and to generate operating revenues in the longer term. There can be no assurance that any such financing can be obtained or that revenues can be generated. If the Company is unable to obtain such additional financing or generate such revenues, investors may be unable to sell their Company Shares and any investment in the Company may be lost.

Abilityto Manage Future Growth

Future growth, if any, may cause a significant strain on the Company’s management and its operational, financial, human and other resources. The Company’s ability to manage growth effectively will require it to implement and improve operational, financial, software development and management information systems and to expand, train, manage and motivate employees. These demands may require the addition of management and other personnel and the development of additional expertise. Any increase in resources devoted to research, product development and marketing and sales efforts without a corresponding increase in operational, financial, product development and management information systems could have a material adverse effect on the Company’s business, financial condition and results of operations. There can be no assurance that the Company will be able to manage such growth effectively, that its management, personnel or systems will be adequate to support the Company’s operations or that the Company will be able to achieve the increased levels of revenue commensurate with the increased levels of operating expenses associated with this growth. The Company is exposed to a variety of financial risks by virtue of its activities, including currency risk, credit risk, and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on financial performance.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Marketfor Securities

In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continuing fluctuations in price will not occur. It may be anticipated that any quoted market for the Company Shares will be subject to market trends generally, notwithstanding any potential success of the Company in creating revenues, cash flows or earnings. The value of the Company Shares will be affected by such volatility.

Dilution and future sale of Common Shares

We may issue additional Common Shares in the future, which may dilute a Shareholder’s holding in the Company. Our articles will permit the issuance of an unlimited number of Common Shares, and Shareholders will have no pre-emptive rights in connection with such further issuances. The Directors of the Company have the discretion to determine if an issuance of Common Shares is warranted, the price at which such issuance is effected and the other terms of issue of Common Shares. Also, we may issue additional Common Shares upon the exercise of options to acquire Common Shares under the Option Plan, which will result in further dilution to the Shareholders. Potential future acquisitions may also divert Management’s attention and result in further dilution to the Shareholders.

Historyof Losses

The Company cannot assure that it can become profitable or avoid net losses in the future or that there will not be any earnings or revenue declines for any future quarterly or other periods. The Company expects that its operating expenses will increase as it grows its business, including expending substantial resources for research and development and marketing. As a result, any decrease or delay in generating revenues could result in material operating losses.

Relianceon Management and Key Employees

The Company’s future success depends substantially on the continued services of its executive officers and its key development personnel. If one or more of its executive officers or key development personnel were unable or unwilling to continue in their present positions, the Company might not be able to replace them easily or at all. In addition, if any of its executive officers or key employees joins a competitor or forms a competing company, the Company may lose know-how, key professionals and staff members as well as partners. These executive officers and key employees could develop drone technologies that could compete with and take customers and market share away from the Company.

RisksAssociated with Acquisitions

As part of the Company’s overall business strategy, after the completion of the Listing, the Company may pursue select strategic acquisitions that would provide additional product or service offerings, additional industry expertise, and a stronger industry presence in both existing and new jurisdictions. Future acquisitions may expose it to potential risks, including risks associated with: (a) the integration of new operations, services and personnel; (b) unforeseen or hidden liabilities; (c) the diversion of resources from the Company’s existing business and technology; (d) potential inability to generate sufficient revenue to offset new costs; (e) the expenses of acquisitions; or (f) the potential loss of or harm to relationships with both employees and existing users resulting from its integration of new businesses. In addition, any proposed acquisitions may be subject to regulatory approval.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Competitive Markets

The Company faces competition and new competitors will continue to emerge throughout the world. Services offered by the Company’s competitors may take a larger share of consumer spending than anticipated, which could cause revenue generated from the Company’s products and services to fall below expectations. It is expected that competition in these markets will intensify.

If competitors of the Company develop and market more successful products or services, offer competitive products or services at lower price points, or if the Company does not produce consistently high-quality and well-received products and services, revenues, margins, and profitability of the Company will decline.

The Company’s ability to compete effectively will depend on, among other things, the Company’s pricing of services and equipment, quality of customer service, development of new and enhanced products and services in response to customer demands and changing technology, reach and quality of sales and distribution channels and capital resources. Competition could lead to a reduction in the rate at which the Company adds new customers, a decrease in the size of the Company’s market share and a decline in its customers. Examples include but are not limited to competition from other companies in the UAV industry.

In addition, the Company could face increased competition should there be an award of additional licences in jurisdictions in which the Company operates in.

Uncertainty and adverse changes in the economy

Adverse changes in the economy could negatively impact the Company’s business. Future economic distress may result in a decrease in demand for the Company’s products, which could have a material adverse impact on the Company’s operating results and financial condition. Uncertainty and adverse changes in the economy could also increase costs associated with developing and publishing products, increase the cost and decrease the availability of sources of financing, and increase the Company’s exposure to material losses from bad debts, any of which could have a material adverse impact on the financial condition and operating results of the Company.

Uncertaintyto develop and renew contracts

A significant portion of the Company’s business is based on the operation of remotely piloted aircraft systems (“RPAS”). The operation of RPAS’ poses a risk or hazard to airspace users as well as personnel on the ground. As the RPAS industry is rapidly developing, the regulatory environment for RPAS is constantly evolving to keep pace. As such, whenever a policy change with respect to operating regulations occurs, there is a risk that the Company could find itself to be in non-compliance with these new regulations and as a result lose the ability to develop and renew contracts relating to its business. While the Company endeavours to take all necessary action to reduce the risks associated with the operations of RPAS’ and to remain well-informed and up-to-date on any addendums and changes to the applicable regulations, there is no assurance that an incident involving an RPAS or the Company’s non-compliance would not create a significant current or future liability for the company.

The regulation of RPAS operations within the Canadian Domestic Airspace (CDA) is still evolving and is expected to continue to change with the proliferation of RPAS’, advancements in technology, and standardization within the industry. Changes to the regulatory regime may be disruptive and result in the Company needing to adopt significant changes in its operations and policies, which may be costly and time-consuming, and may materially adversely affect our ability to manufacture and make delivery of our Company’s products and services in a timely fashion.

Company business and research and development activities are subject to oversight by Transport Canada, the federal institution responsible for transportation policies and programs, including the rules in the Canadian Aviation Regulations (CARs). Currently, Transport Canada requires that any non-recreational operators of RPAS’ have a Special Flight Operations Certificate (SFOC). Our ability to develop, test, demonstrate, and sell products and services depends on the Company’s ability to acquire and maintain a valid SFOC.

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

In addition, there exists public concern regarding the privacy implications of Canadian commercial and law enforcement use of small UAV. This concern has included calls to develop explicit written policies and procedures establishing usage limitations. There is no assurance that the response from regulatory agencies, customers and privacy advocates to these concerns will not delay or restrict the adoption of small UAV by non-military customers.

Attractand retain engineering talent and other highly qualified personnel

The Company may experience a period of significant growth and require a high number of personnel that will place a strain upon its management systems and resources. Its future will depend in part on the ability of its officers and other key employees to implement and improve financial and management controls, reporting systems and procedures on a timely basis and to expand, train, motivate and manage the workforce. The Company’s current and planned personnel, systems, procedures and controls may be inadequate to support its future operations. Further, management may not be able to retain its existing workforce in an expanding and competitive marketplace for talent.

Abilityto successfully develop and commercially market new products

Continuing technological changes in the market for the Company’s products could make its products less competitive or obsolete, either generally or for particular applications. The Company’s future success will depend upon its ability to develop and introduce a variety of new capabilities and enhancements to its existing product and service offerings, as well as introduce a variety of new product offerings, to address the changing needs of the markets in which it offers products. Delays in introducing new products and enhancements, the failure to choose correctly among technical alternatives or the failure to offer innovative products or enhancements at competitive prices may cause existing and potential customers to purchase the Company’s competitors’ products. If the Company is unable to devote adequate resources to develop new products or cannot otherwise successfully develop new products or enhancements that meet customer requirements on a timely basis, its products could lose market share, its revenue and profits could decline, and the Company could experience operating losses.

Changingpolicies and spending priorities of governments and government agencies

The Company must comply with Canadian federal and provincial laws regulating the export of its products. In some cases, explicit authorization from the Canadian government is needed to export its products. The export regulations and the governing policies applicable to the Company’s business are subject to change. The Company cannot provide assurance that such export authorizations will be available for its products in the future. Compliance with these laws has not significantly limited the Company’s operations or sales in the recent past, but could significantly limit them in the future. Non-compliance with applicable export regulations could potentially expose the Company to fines, penalties and sanctions. If the Company cannot obtain required government approvals under applicable regulations, the Company may not be able to sell its products in certain international jurisdictions, which could adversely affect the Company’s financial condition and results of operations.

Accessadditional capital when required and on reasonable terms

In order to finance future operations and development efforts, the Company may raise funds through the issue of Common Shares or the issue of securities convertible into or exercisable for Common Shares. The Company cannot predict the size of future issues of Common Shares or the issue of securities convertible into or exercisable for Common Shares or the effect, if any, that future issues and sales of the Common Shares will have on the market price of the Common Shares. Any transaction involving the issue of previously unissued shares, or securities convertible into or exercisable for shares, would result in dilution, which may be substantial, to existing holders of shares

Continuingimpact from COVID-19

The outbreak of the coronavirus, also known as “COVID-19,” spread across the globe and is ‎impacting worldwide economic activity. Government authorities have implemented emergency ‎measures to mitigate the spread of the virus. These measures, which include the ‎implementation of travel bans, self-imposed quarantine periods, and social distancing, have ‎caused material disruption to business globally. ‎Governments and central banks reacted with significant monetary and fiscal interventions ‎designed to stabilize economic conditions.‎

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DraganflyInc.

ManagementDiscussion and Analysis

Forthe three and nine months ended September 30, 2021

Creditrisk

Credit and liquidity risk associated with cash and the marketable security is managed by ensuring assets are placed with major financial institutions with strong investment grade ratings.

Credit risk on trade and other receivables reflects the risk that the Company may be unable to recover them. The Company manages its credit risk by closely monitoring the granting of credit. Trade and other receivables that are greater than 30 days are considered past due. Based on the status of trade and other receivables, no allowance for doubtful accounts has been recorded as at September 30, 2021 (December 31, 2020 - $nil).

Interestrate risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposure through its normal operating and financing activities. The Company is exposed to minimal interest rate risk on its cash balances as they carry a floating rate of interest.

Foreigncurrency risk

The Company does engage in significant transactions and activities in currencies other than its functional currency. Depending on the timing of the transactions and the applicable currency exchange rates such conversions may positively or negatively impact the Company.

OtherInformation

Additional information about the Company is available at www.draganfly.com

Approval

This MD&A is authorized for issue by the Board on November 9, 2021.

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Exhibit99.3

Form52-109F2 – IPO/RTO

Certificationof Interim Filings Following ‎

anInitial Public Offering, Reverse Takeover or ‎

Becominga Non-Venture Issuer

I, Cameron Chell, the Chief Executive Officer of Draganfly Inc., certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together, the ‎‎“interim filings”) of Draganfly Inc. (the “issuer”) for the interim period ended September 30, 2021.‎

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not ‎contain any untrue statement of a material fact or omit to state a material fact required to be ‎stated or that is necessary to make a statement not misleading in light of the circumstances ‎under which it was made, with respect to the period covered by the interim filings. ‎

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report ‎together with the other financial information included in the interim filings fairly present in ‎all material respects the financial condition, financial performance and cash flows of the ‎issuer, as of the date of and for the periods presented in the interim filings. ‎

Date: November 9, 2021

/s/ Cameron Chell
Cameron<br> Chell
Chief<br> Executive Officer

NOTETO READER

In contrast to the usual certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure inIssuers’ Annual and Interim Filings (NI 52-109), namely, Form 52-109F2, this Form 52-109F2 – IPO/RTO does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i)	controls<br> and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual<br> filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and<br> reported within the time periods specified in securities legislation; and
ii)	a<br> process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifying officers of an issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 in the first financial period following

●	completion<br> of the issuer’s initial public offering in the circumstances described in s. 5.3 of NI 52-109;
●	completion<br> of a reverse takeover in the circumstances described in s. 5.4 of NI 52-109; or
●	the<br> issuer becoming a non-venture issuer in the circumstances described in s. 5.5 of NI 52-109;

may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

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Exhibit99.4

Form52-109F2 – IPO/RTO

Certificationof Interim Filings Following ‎

anInitial Public Offering, Reverse Takeover or ‎

Becominga Non-Venture Issuer

I, Paul Sun, the Chief Financial Officer of Draganfly Inc., certify the following:

Date: November 9, 2021

/s/ Paul Sun
Paul<br> Sun
Chief<br> Financial Officer

NOTETO READER

i)	controls<br> and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual<br> filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and<br> reported within the time periods specified in securities legislation; and
ii)	a<br> process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with the issuer’s GAAP.

●	completion<br> of the issuer’s initial public offering in the circumstances described in s. 5.3 of NI 52-109;
●	completion<br> of a reverse takeover in the circumstances described in s. 5.4 of NI 52-109; or
●	the<br> issuer becoming a non-venture issuer in the circumstances described in s. 5.5 of NI 52-109;

may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

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Exhibit99.5

Draganfly Announces Record Third Quarter Revenue

LosAngeles, CA., November 9, 2021 — Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8) (“Draganfly” or the “Company”), an award-winning, industry-leading drone solution developer and operator, is pleased to announce its third quarter financial results.

Key Financial and Operational Highlights for Q3 2021:

●	‎Revenue<br> for the third quarter increased 30.5% to $1,896,992 up from $1,453,905 in the third quarter of 2020. Third quarter revenue was made<br> up of $1,351,517 from product sales while $411,756 was from drone services with the balance coming from engineering services‎.
●	Gross<br> profit increased by $212,586 or 37.9% for the third quarter over the same period last year. Gross margin percentage for Q3 2021 was<br> 40.8% compared to 38.5% in Q3 2020. This was attributed to a larger contribution of engineering services this quarter versus the<br> same period last year, as these services tend to have higher gross margins than the other categories.
●	Total<br> comprehensive income for Q3 2021 was $24.0 million compared to a loss of $2.5 million in Q3 2020. The large increase is from the<br> accounting treatment of a $30.6 million non-cash liability from USD warrants that were issued during the Company’s Reg A offering.<br> The year over year comprehensive income increased as Q3 2020 did not have the treatment of the USD warrants from the Company’s<br> Reg A offering. The increase year over year was somewhat offset by an increase in office and miscellaneous expenses and professional<br> expenses.
●	Cash<br> balance on September 30, 2021 of $28.0 million compared to $2.0 million on December 31, 2020.
●	Draganfly<br> signed a minimum $9 million manufacturing agreement with Digital Dream Labs, Inc. (“DDL”) to design and develop an AI<br> consumer companion robot drone (the “Drone”). As per the terms of the announced agreement, Draganfly will be the exclusive<br> manufacturer and assembler. DDL will order at least 50,000 units annually with delivery starting in 2022. The Drone will be integrated<br> into DDL’s existing product family, including support, sales, and distribution channels used for their other consumer robots.<br> Draganfly has also been granted a right of first refusal to become the exclusive manufacturer and assembler of subsequent drone or<br> UAV-based robots to be added to DDL’s product portfolio. The parties have entered into a binding letter agreement reflecting<br> the above terms and will use commercially reasonable efforts to enter into a definitive agreement. The binding letter agreement will<br> govern the relationship between DDL and Draganfly and there can be no assurance that a definitive agreement will be completed or<br> entered into amongst the parties.
●	Draganfly<br> entered into an exclusive manufacturing agreement with Valqari LLC (“Valqari”) to produce its Drone Delivery Stations.<br> The Valqari Delivery Station is a patented universal drone receptacle for package delivery and pick-up. It will allow Valqari to<br> revolutionize drone deliveries for industries including pharmaceuticals, meal delivery, grocery services, governments, and residential<br> e-commerce. As per the manufacturing agreement, Draganfly will be the exclusive manufacturer of Valqari’s Drone Delivery Stations.<br> Valqari will be ordering at least $400,000 of manufacturing services during the initial phase of the agreement.
●	Draganfly<br> successfully completed over 300 daytime drone delivery test flights with EMS personnel in Texas. 100 of the successful flights were<br> completed with the Company’s innovative temperature managed payload box, which can transport up to 15 pounds of medical supplies<br> including vaccines and testing kits. The payload box is uniquely top mounted to make deliveries safer and more accessible. Initial<br> night flight training and testing is being scheduled to commence. The data collected from Draganfly’s daytime and night flight<br> tests will be submitted to the Federal Aviation Administration (FAA) for approval to enter Phase 2 of its five-phase agreement with<br> Coldchain Technology Services, LLC. Feedback from EMS personnel is also being used to improve Draganfly’s training module and<br> develop industry standards.
●	The<br> Drone Racing League (“DRL”) announced a multi-year partnership with Draganfly. The companies will launch DRL Labs, an<br> innovation hub, to research and develop next generation drone technology that will advance the sport of drone racing and other industries<br> undergoing significant transformations through drones, including humanitarian aid and mobility. DRL will incorporate Draganfly’s<br> groundbreaking AI Vital Intelligence platform into its 2021-22 DRL World Championship Season, which will be used to monitor pilots’<br> in-race heart and respiratory-rates. DRL will also release a “Why I Fly” Series Presented by Draganfly, spotlighting<br> pilots’ personal journeys into drone flying during the 2021-22 Season.
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●	Draganfly’s<br> Drone Pilot Training program is now being offered at Alabama State University (“ASU”) in Montgomery, Alabama. The nine-week<br> course includes an FAA Part 107 drone preparation course. To fly drones under the FAA’s Small Unmanned Aircraft Systems<br> (UAS) Rule (Part 107), a Remote Pilot Certificate must be obtained. The certificate demonstrates that pilots understand the regulations,<br> operating requirements, and procedures for safely flying drones. It is also inclusive of specific skills for sensors, software, and<br> missions as it relates to varied specific high demand drone operations like emergency response, delivery, and security. Following<br> the end of the pilot project in the winter, ASU is expected to add the course to its continuing education program. Draganfly’s<br> Drone Pilot Training program will also be commercialized next year.
●	Draganfly’s<br> Vital Intelligence Smart Vital system has been integrated into Fobi AI Inc.’s (“Fobi”) (TSXV: FOBI) Venue Management<br> System for Conferences & Events. The venue management platform will now consist of Draganfly’s Smart Vital assessment system,<br> Fobi’s Passcreator mobile Wallet passes, proprietary Smart Tap Devices, Smart Scan Pass Validation App, and Insight Portal<br> for event analytics.
●	Draganfly<br> launched its Draganflyer Commander2 drone system. Exclusively designed, developed and manufactured in Canada, the system fully complies<br> with “Built-in-North America” requirements. It takes maximum advantage of federal regulatory requirements concerning<br> the origin and security of drone systems and devices. The Draganflyer Commander2 is a small Unmanned Aerial System (sUAS) and replaces<br> the highly respected Commander platform that launched in 2015. The new model improves operational capabilities and payload options,<br> as well as offering new North American built and sourced flight controllers, sensors, communications, and utilises Mav-Link based<br> mission planning software. Draganfly’s latest class leading drone is ready to answer the needs of the commercial, farming,<br> geological, military, and emergency services sectors.

Cameron Chell, CEO of Draganfly, said: “Maintaining our positive momentum, we successfully executed more operational milestones than any previous quarter and look for this to translate into ongoing strong financial performance. The Q3 revenues are a testament to the entire team’s dedication to meet the unique demands of the rapidly growing drone space. We remain focused on becoming the leading commercial drone manufacturer and solutions provider in North America within the next few years.”

Draganfly will hold a shareholder update and earnings call on November 9, 2021 at 2:30PM MST / 4:30PM EST.

Registration for the call can be done here: https://businessinstinctsgroup.zoom.us/webinar/register/1616358722368/WN_2NpI0zfxQ_uBtYF_mGi5ng.

Selected financial information is outlined below and should be read with Draganfly’s consolidated financial statements for the quarter ended September 30, 2021, and associated management discussion and analysis, which will be available under the Company’s profile on SEDAR at www.sedar.com.

						Nine months ended September 30,
			2020			2021			2020
Total revenues	1,896,992		$	1,453,905		$	5,418,600		$	2,877,502
Gross Profit (as a % of revenues)	40.8	%		38.5	%		37.2	%		49.7	%
Net income (loss)	23,840,499	^(1)^		(2,450,311	)		(29,105,655	)^(1)^		(4,522,938	)
Net income (loss) per share ()
-Basic	0.79			(0.16	)		(1.18	)		(0.31	)
-Diluted	0.74			(0.16	)		(1.18	)		(0.31	)
Comprehensive income (loss)	23,975,400	^(1)^		(2,451,543	)		(29,034,603	)^(1)^		(4,524,069	)
Comprehensive income (loss) per share ()
-Basic	0.79			(0.16	)		(1.18	)		(0.31	)
-Diluted	0.75			(0.16	)		(1.18	)		(0.31	)
Change in cash and cash equivalents	8,802,746		$	(844,909	)	$	25,833,262		$	(1,779,056	)

All values are in US Dollars.

As at	September 30, 2021			December 31, 2020
Total assets	$	60,240,843		$	7,100,567
Working capital		20,510,097	^(2)^		1,214,371
Total non-current liabilities		253,527			104,885
Shareholders’ equity	$	41,289,675	^(2)^	$	3,848,205
Number of shares outstanding (post-consolidation)		32,156,950			17,218,672

Notes:

(1)	The<br> net income (loss) and comprehensive income (loss) for the three and nine months ended September 30, 2021 include a change in fair<br> value of derivative liability for USD warrants of a gain of $30,562,044 and a loss of $15,278,305, respectively, and would otherwise<br> be losses of $6,721,545 and $13,827,350 for the net loss, and $6,586,644 and $13,756,298 for the comprehensive loss, respectively.
(2)	Shareholders’<br> equity and working capital as at September 30, 2021 includes a fair value of derivative liability for USD warrants of $16,890,998<br> and would otherwise be shareholders’ equity of $58,180,673 and working capital of $37,401,095.
	2021 Q3			2021 Q2			2020 Q3
---	---	---	---	---	---	---	---	---	---
Revenue	$	1,896,992		$	1,981,872		$	1,453,905
Cost of goods sold	$	(1,123,942	)	$	(1,253,279	)	$	(893,441	)
Gross profit	$	773,050		$	728,593		$	560,464
Gross margin – percentage		40.8	%		36.8	%		38.5	%
Operating expenses	$	(8,006,957	)	$	(3,340,952	)	$	(2,852,003	)
Operating loss	$	(7,233,907	)	$	(2,612,359	)	$	(2,291,539	)
Operating loss per share - basic	$	(0.24	)	$	(0.10	)	$	(0.15	)
Operating loss per share - diluted	$	(0.22	)	$	(0.10	)	$	(0.15	)
Other income (expense)	$	31,074,406	^(3)^	$	(5,409,861	)^(3)^	$	91,228
Other comprehensive income	$	134,901		$	9,684		$	(1,232	)
Comprehensive income (loss)	$	23,975,400		$	(8,095,356	)	$	(2,451,453	)
Comprehensive income (loss) per share - basic	$	0.79		$	(0.30	)	$	(0.14	)
Comprehensive income (loss) per share - diluted	$	0.75		$	(0.30	)	$	(0.14	)

Note:

(3)	The<br> other income and comprehensive income for the third quarter of 2021 include a change in fair value of derivative liability for USD<br> warrants of $30,562,044 and would otherwise be an income of $512,362 and loss of $6,586,644.

All financial information in this press release is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Note: this press release refers to “gross margin” which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada (“GAAP”). Gross margin is defined as gross profit divided by revenue and is often presented as a percent. Draganfly’s management believes that gross margin and other non-GAAP measures provide useful information to investors as it provides them with ‎supplemental measures of the Company’s operating performance and liquidity and thus highlights trends in the Company’s ‎business that may not otherwise be apparent when relying solely on GAAP measures. Management also uses non-GAAP measures and ‎metrics in order to facilitate operating performance comparisons from period to period, to prepare ‎annual operating budgets and forecasts and to determine components of executive compensation. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the “Non-GAAP Measures and Additional GAAP Measures”‎ section of the Company’s most recent MD&A which is available on SEDAR.

AboutDraganfly

Draganfly Inc. (NASDAQ: DPRO; CSE: DPRO; FSE: 3U8) is the creator of quality, cutting-edge software, and systems that revolutionize the way organizations can do business and service their stakeholders. Recognized as being at the forefront of technology for over 22 years, Draganfly is an award-winning, industry-leading manufacturer and technology developer serving the public safety, agriculture, industrial inspections, security, and mapping and surveying markets. Draganfly is a company driven by passion, ingenuity, and the need to provide efficient solutions and first-class services to its customers around the world with the goal of saving time, money, and lives.

For more information on Draganfly, please visit us at www.draganfly.com.

For additional investor information visit https://www.thecse.com/en/listings/technology/draganfly-‎inc, https://www.nasdaq.com/market-activity/stocks/dpro or https://www.boerse-‎frankfurt.de/aktie/draganfly-inc. ‎

MediaContact

Arian Hopkins

Email: media@draganfly.com

CompanyContact

Cameron Chell, CEO

PH: 310-658-4413

Email: info@draganfly.com

Forward-LookingStatements

This release contains certain “forward looking statements” and certain “forward-looking information” as ‎defined under applicable Canadian securities laws. Forward-looking statements and information can ‎generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, ‎‎“estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements ‎and information are based on forecasts of future results, estimates of amounts not yet determinable and ‎assumptions that, while believed by management to be reasonable, are inherently subject to significant ‎business, economic and competitive uncertainties and contingencies. Forward-looking statements and ‎information are subject to various known and unknown risks and uncertainties, many of which are beyond ‎the ability of the Company to control or predict, that may cause the Company’s actual results, ‎performance or achievements to be materially different from those expressed or implied thereby, and are ‎developed based on assumptions about such risks, uncertainties and other factors set out here in, ‎including but not limited to: the potential impact of epidemics, pandemics or other public health crises, ‎including the current outbreak of the novel coronavirus known as COVID-19 on the Company’s business, ‎operations and financial condition, the successful integration of technology, the inherent risks involved in ‎the general securities markets; uncertainties relating to the availability and costs of financing needed in ‎the future; the inherent uncertainty of cost estimates and the potential for unexpected costs and ‎expenses, currency fluctuations; regulatory restrictions, liability, competition, loss of key employees and ‎other related risks and uncertainties disclosed under the heading “Risk Factors” in the Company’s most ‎recent filings filed with securities regulators in Canada on the SEDAR website at www.sedar.com. The ‎Company undertakes no obligation to update forward-looking information except as required by ‎applicable law. Such forward-looking information represents managements’ best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results ‎may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking ‎statements or information.